DEF 14A 1 definitiveproxyforyearende.htm DEFINITIVE PROXY FOR YEAR ENDED 12-31-2014 Definitive Proxy for year ended 12-31-14


UNITED STATES
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EMC Corporation






April 30, 2015
Hopkinton, Massachusetts
 
Notice of
2015 Annual Meeting of Shareholders and Proxy Statement









March 20, 2015

Dear Shareholder:

We cordially invite you to attend our 2015 Annual Meeting of Shareholders, which will be held on Thursday, April 30, 2015, at 10:00 a.m., E.D.T., at EMC’s facility at 176 South Street, Hopkinton, Massachusetts.

At the meeting you will vote on a number of important matters. You should carefully read the attached Proxy Statement which contains detailed information about each proposal.

If you plan to join us at the meeting, please register at www.emc.com/annualmeeting2015.

Following completion of the scheduled business, we will report on EMC’s operations. Your Board of Directors and officers of EMC will then be available to answer questions and speak with you. We hope that you will be able to join us on April 30th.



Very truly yours,

JOSEPH M. TUCCI
Chairman and Chief Executive Officer







March 20, 2015

Dear fellow shareholders:

It is my privilege to begin serving as independent Lead Director of the EMC Board of Directors. This extremely accomplished and engaged group of individuals, with experience relevant to our business, is committed to executing its governance responsibilities and providing appropriate oversight of the Company’s operations and long-term strategy with the highest level of independence and transparency.

Careful attention to Board composition is an important part of our role. Over the years, the Board has spent significant time considering its membership both as part of our annual self-evaluation process and at other times of the year as the needs of the Board and EMC have changed. This year, we clarified our list of criteria for director candidates to state explicitly our commitment to actively identify and recruit diverse candidates, including women and minority candidates. While this has been part of our search process for years, we believe adding the strong, active language to the Governance Committee’s charter signals the Board’s seriousness about this important matter. This past January, we were also pleased to welcome José E. Almeida and Donald J. Carty to the Board - two well-respected, experienced individuals who will bring a fresh perspective to the Board and management. And, we refreshed several committee roles and committee chairs.

Let me extend my heartfelt thanks to Gail Deegan who will not be standing for re-election this year. Gail has been an outstanding and dedicated member of the Board. She served nine years as Chair of our Audit Committee and two years as Chair of our Corporate Governance and Nominating Committee. Her considerable financial expertise, commitment to the highest standards of governance and transparency, and advocacy for EMC have provided tremendous value to the Board and made EMC a better company.

As Lead Director, one of my responsibilities is to help the Board assess its leadership structure and to effectuate good governance. Let me assure you that the Board is focused on providing the right structure at the right time for the Company, and we undertake serious and deliberate consideration of the matter anew each year. As discussed more fully in the attached Proxy Statement, the Board believes the current arrangement with Joe Tucci serving as our Chairman and CEO best serves the interests of EMC shareholders and the Company at this time.

Balancing the various interests of the Company’s stakeholders is another important focus for the Board. This year, the Board had the opportunity to speak with and hear directly from shareholders, customers, partners and EMC employees on a number of different topics. We appreciate the honest feedback, the open exchange of ideas, and the opportunity to learn from one another. We are a Board that welcomes and values dialogue with our stakeholders.

I look forward to working with the Chairman and my fellow Board members as we continue to focus on creating sustained shareholder value.

Sincerely,
WILLIAM D. GREEN
Independent Lead Director








NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS

March 20, 2015

To the Shareholders:

The Annual Meeting of Shareholders of EMC Corporation, a Massachusetts corporation, will be held at EMC’s facility at 176 South Street, Hopkinton, Massachusetts, on Thursday, April 30, 2015, at 10:00 a.m., E.D.T., for the following purposes:

1.
Election of the twelve director nominees listed in the attached Proxy Statement to the Board of Directors.

2.
Ratification of the selection by the Audit Committee of PricewaterhouseCoopers LLP as EMC’s independent auditors for the fiscal year ending December 31, 2015, as described in the attached Proxy Statement.

3.
Advisory approval of our executive compensation, as described in the attached Proxy Statement.

4.
Approval of the EMC Corporation Amended and Restated 2003 Stock Plan, as described in the attached Proxy Statement.

5.
Act upon one shareholder proposal, if properly presented, as described in the attached Proxy Statement.

In addition, we will consider any and all other business that may properly come before the meeting or any adjournments or postponements of the meeting.

All shareholders of record at the close of business on February 27, 2015 are entitled to notice of and to vote at the meeting and any adjournments or postponements of the meeting. We will begin distributing these proxy materials to shareholders on or about March 20, 2015.

Your vote is important. Whether or not you plan to attend the meeting, please vote as soon as possible. For specific instructions on how to vote your shares, please refer to the section entitled “Questions and Answers about the Annual Meeting and Voting” beginning on page 100 of the attached Proxy Statement.

EMC’s Annual Report on Form 10-K for 2014 accompanies this Notice.

By order of the Board of Directors
PAUL T. DACIER
Executive Vice President,
General Counsel and Assistant Secretary

March 20, 2015

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on April 30, 2015: The Annual Report on Form 10-K for 2014 and 2015 Proxy Statement are available at www.proxyvote.com.





YOUR VOTE IS IMPORTANT
Whether or not you plan to attend the meeting, please vote as soon as possible. Under New York Stock Exchange rules, your broker will NOT be able to vote your shares on proposals 1, 3, 4 or 5 unless they receive specific instructions from you.  We strongly encourage you to vote.


We encourage you to vote by Internet.  It is convenient for you and saves us significant postage and processing costs. For specific instructions on how to vote your shares, please refer to the section entitled “Questions and Answers about the Annual Meeting and Voting” beginning on page 100 of the attached Proxy Statement.


We have been advised that many states are strictly enforcing escheatment laws and requiring shares held in “inactive” accounts to be escheated to the state in which the shareholder was last known to reside. One way you can ensure your account is active is to vote your shares.










TABLE OF CONTENTS
Summary Information
1
Proposals
6
Election of Directors
6
Ratification of Selection of Independent Auditors
23
Advisory Approval of Executive Compensation
25
Approval of the EMC Corporation Amended and Restated 2003 Stock Plan
26
Shareholder Proposal
34
Corporate Governance
38
Board Leadership Structure
38
Risk Oversight
40
Succession Planning
41
Annual Election of Directors
42
Majority Vote for Directors
42
Executive Sessions of Directors
43
Shareholder Engagement
43
Communications with the Board
44
Director Orientation and Continuing Education
45
Director Stock Ownership Guidelines
45
Sustainability
45
Political Contributions
46
Simple Majority Vote
46
Board Committees
47
Security Ownership of Certain Beneficial Owners and Management
51
Equity Compensation Plan Information
52
Leadership and Compensation Committee Report
53
Compensation Discussion and Analysis
54
Executive Summary
54
Named Executive Officers
59
EMC’s Executive Compensation Program
59
Compensation of Executive Officers
77
Summary Compensation Table
77
Grants of Plan-Based Awards
80
Outstanding Equity Awards at Fiscal Year-End
82
Option Exercises and Stock Vested
85
Pension Benefits
85





Nonqualified Deferred Compensation
85
Potential Payments upon Termination or Change in Control
86
Director Compensation
92
Review and Approval of Transactions with Related Persons
95
Certain Transactions
95
Audit Committee Report
96
Rule 14a-8 Shareholder Proposals for EMC’s 2016 Proxy Statement
98
Business and Nominations for EMC’s 2016 Annual Meeting
98
Section 16(a) Beneficial Ownership Reporting Compliance
98
Householding
99
Questions and Answers About the Annual Meeting and Voting
100







CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Proxy Statement contains forward-looking statements, within the meaning of the Federal securities laws, about our business and prospects. The forward-looking statements do not include the potential impact of any mergers, acquisitions, divestitures, securities offerings or business combinations that may be announced or closed after the date hereof. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “plans,” “intends,” “expects,” “goals” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Our future results may differ materially from our past results and from those projected in the forward-looking statements due to various uncertainties and risks, including, but not limited to, those described in Item 1A of Part I (Risk Factors) of our Annual Report on Form 10-K for 2014. The forward-looking statements speak only as of the date of this Proxy Statement and undue reliance should not be placed on these statements. We disclaim any obligation to update any forward-looking statements contained herein after the date of this Proxy Statement.






SUMMARY INFORMATION

This summary highlights information contained elsewhere in this Proxy Statement. For more complete information about these topics, please review the Company’s Annual Report on Form 10-K and the entire Proxy Statement.
Annual Meeting of Shareholders
•  Date and Time:        
April 30, 2015 at 10:00 a.m., E.D.T.
  Place:
EMC Corporation
176 South Street, Hopkinton, MA 01748
•  Record Date:        
February 27, 2015
•  Attendance:
All shareholders may attend the meeting. If you plan to join us at the meeting, please go to www.emc.com/annualmeeting2015 to complete the registration form. The deadline for registration is April 23, 2015. All shareholders who attend the meeting will be required to present valid government-issued picture identification, such as a driver’s license or passport, and will be subject to security screenings. Check-in will begin at 9:00 a.m.

•  Voting:
Shareholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and each of the other proposals.

Vote by
Internet
Vote by
Mobile Device
Vote by
Telephone
Vote by
Mail
Vote
In Person
Go to www.proxyvote.com and enter the 12 digit control number provided on your proxy card or voting instruction form.


Scan this QR code to vote with your mobile device. You will need the 12 digit control number provided on your proxy card or voting instruction form.


Call 1-800-690-6903 or the number on your proxy card or voting instruction form. You will need the 12 digit control number provided on your proxy card or voting instruction form.


Complete, sign and date the proxy card or voting instruction form and mail it in the accompanying pre-addressed envelope.


See the instructions above regarding attendance at the Annual Meeting.

We encourage you to vote by Internet. It is convenient for you and saves us significant postage and processing costs. If you previously elected to access the 2015 Proxy Statement and Annual Report on Form 10-K for 2014 electronically, you must vote your proxy over the Internet. Otherwise, you may vote your shares via the other methods described above.
Meeting Agenda and Voting Recommendations
Agenda Item
Board Recommendation
Page
Election of twelve directors
FOR EACH NOMINEE
6
Ratification of selection of PricewaterhouseCoopers LLP as our independent auditors
FOR
23
Advisory approval of our executive compensation
FOR
25
Approval of the EMC Corporation Amended and Restated 2003 Stock Plan
FOR
26
Shareholder proposal
AGAINST
34




Summary Information (continued)



Director Nominees

We are asking you to vote “for” all of the director nominees listed below. All directors attended at least 75% of the Board meetings and committee meetings which were held during the period in which he or she was a director of EMC and in which he or she was a member of such committee. Set forth below is summary information about each director nominee.
Nominee and
Principal Occupation
Age
Director Since
Independent
Current Committee Membership
José E. Almeida
Former Chairman, President and Chief Executive Officer of Covidien plc
52
2015
ü

• Finance
• Leadership and Compensation
Michael W. Brown
Former Vice President and Chief Financial Officer of Microsoft Corporation
69
2005
ü

• Audit
• Finance (chair)
Donald J. Carty
Private Investor
68
2015
ü

• Corporate Governance and Nominating
Randolph L. Cowen
Former co-Chief Administrative Officer of The Goldman Sachs Group, Inc.
64
2009
ü

• Leadership and Compensation (chair)
• Mergers and Acquisitions
James S. DiStasio
Former Senior Vice Chairman and Americas Chief Operating Officer of Ernst & Young LLP
67
2010
ü

• Audit (chair)
• Corporate Governance and Nominating
John R. Egan
Managing Partner and General Partner of Egan Managed Capital
57
1992
 
• Finance
• Mergers and Acquisitions (chair)
William D. Green
Former Chairman of Accenture plc
61
2013
ü

• Leadership and Compensation
• Mergers and Acquisitions
Edmund F. Kelly
Former Chairman of Liberty Mutual Group
69
2007
ü

• Finance
Jami Miscik
President and Vice Chairman of Kissinger Associates, Inc.
56
2012
ü

• Corporate Governance and Nominating (chair)
Paul Sagan
Executive In Residence (XIR) of General Catalyst Partners
56
2007
ü

• Leadership and Compensation
David N. Strohm
Venture Partner of Greylock Partners
66
2003
ü

• Corporate Governance and Nominating
• Mergers and Acquisitions
Joseph M. Tucci
Chairman and Chief Executive Officer of EMC Corporation
67
2001
 
• Finance
• Mergers and Acquisitions
Corporate Governance Highlights
ü Substantial majority of independent directors (10 of 12 nominees)
ü Annual election of directors
ü Majority vote for directors
ü Independent Lead Director
ü Annual review of Board leadership structure
ü Board oversight of risk management
ü Succession planning at all levels, including for
directors and CEO
ü Commitment to Board diversity
ü Long-standing shareholder engagement program
ü Annual Board, committee and director evaluations
ü Executive sessions of non-management directors and independent directors
ü Continuing director education
ü Executive and director stock ownership guidelines
ü No supermajority voting requirements
ü Board oversight of sustainability program
ü Board oversight and disclosure of political spending

2



Summary Information (continued)



Auditors

As a matter of good corporate governance, we are asking you to ratify the selection by the Audit Committee of PricewaterhouseCoopers LLP (“PwC”) as our independent auditors for 2015. The following table summarizes the fees PwC billed us for 2014 and 2013. The Audit Committee pre-approved all audit, review and attest services performed by PwC.
 
Audit Fees ($)
Audit-Related Fees ($)
Tax Fees ($)
All Other Fees ($)
2014
9,092,340
235,485
2,857,106
187,000
2013
8,745,311
418,342
2,453,392
Business Strategy

The evolution of the IT marketplace, driven by the adoption of mobile devices, cloud computing, Big Data and social networking, continues to have a profound impact on enterprises and the way people work and live. EMC’s strategy is to enable enterprises to modernize their client/server-based infrastructures and applications while helping them to build new infrastructures and applications that take advantage of next generation opportunities in the cloud/mobile era of computing.

EMC is executing this strategy through our Federation business model, which includes three distinct businesses: EMC Information Infrastructure, Pivotal Software and VMware Virtual Infrastructure (the “Federation”), which are strategically aligned to provide benefits for customers and partners. Under this Federation model, each business operates freely and independently to build its own ecosystem. Customers have the ability to choose from a selection of the very best technology solutions, free from vendor lock-in. We believe this model creates a competitive advantage by ensuring tight integration of solutions for customers who prefer an integrated solution, and at the same time by allowing us to provide the best-of-breed offerings on a standalone basis for customers who prefer maximum flexibility in vendor and deployment options.

EMC stands at the forefront of the IT industry with a leading portfolio of products, services and solutions that provide a strong position from which to compete in the client/server-based platform of IT, which will continue to support the majority of enterprise workloads for several years to come; leading-edge technologies and products for the new cloud/mobile platform of IT; and powerful capabilities to help enterprises bridge the two.
Advisory Approval of our Executive Compensation

The Leadership and Compensation Committee (the “Compensation Committee”) approved an executive compensation program for 2014 that implemented our pay-for-performance philosophy, with the following enhancements:
Introduced a long-term equity incentive plan;
Added a relative TSR metric; and
Simplified the equity program by using fewer types of equity awards.

Since our financial and total shareholder return results fell below applicable incentive plan targets and the Named Executive Officers failed to achieve all of their respective strategic and operational goals, cash bonuses and performance equity awards paid out or vested below target.

The following cash bonuses were paid:
93.7% of target was paid out under the 2014 Corporate Incentive Plan; and
82% to 93% of target was paid out under the 2014 Executive Management By Objectives Plan (the “Executive MBO”).

3



Summary Information (continued)



The following performance equity awards vested:

38.7% of the 2012 Leadership Development and Performance Award became eligible to vest; and
50% of the 201l LTIP stock units became eligible to vest.

Below is a summary of the Named Executive Officers’ 2013 and 2014 compensation as set forth in the Summary Compensation Table:
Name
Year
Salary
($)
Cash Incentive Compensation
($)
Equity
Awards
($)
All Other
Compensation
($)
Total
($)
Joseph M. Tucci
2014
1,000,000
1,307,021
8,415,112
481,186
11,203,318
2013
1,000,000
1,260,058
10,076,821
309,079
12,645,957
David I. Goulden
2014
850,000
1,075,513
8,415,112
190,632
10,531,257
2013
850,000
1,006,296
6,453,659
122,621
8,432,576
Zane C. Rowe
2014
167,308
174,686
6,000,019
54,350
6,696,362
Howard D. Elias
2014
750,000
746,183
5,259,464
178,839
6,934,486
2013
750,000
700,032
4,444,834
136,194
6,031,061
Jeremy Burton
2014
768,750
717,035
5,259,464
158,236
6,903,485
2013
675,000
590,652
4,117,680
92,886
5,476,218
William F. Scannell
2014
700,000
699,546
5,259,464
172,271
6,831,281
2013
700,000
656,280
4,444,834
108,412
5,909,526

For more information, please see the Summary Compensation Table, and the accompanying compensation tables, beginning on page 77 of this Proxy Statement.
Other Compensation Practices
What We Do
ü Pay-for-performance 
ü Maintain “double trigger” change in control agreements
ü Maintain a clawback policy applicable to all employees for cash and equity incentive compensation
ü Compensation Committee oversees risks associated with compensation policies and practices
ü Compensation Committee retains an independent compensation consultant
What We Do Not Do
û No hedging or pledging of Company stock
û No excessive perquisites for executives
û No pension or SERP benefits for executives
û No excise tax gross-ups
Amended and Restated 2003 Stock Plan

Equity is a key component of our compensation program. Equity awards encourage employee loyalty to EMC and align employee interests with those of EMC shareholders. The 2003 Stock Plan allows us to provide our key employees, consultants, advisors and non-employee directors with equity incentives that are competitive with those of companies with which EMC competes for talent.
    
We are asking you to approve an amendment and restatement of the 2003 Stock Plan which would, among other things, increase the number of shares of common stock available for grant under the plan by 40 million shares. Some benefits and key features of the plan include:


4



Summary Information (continued)



l Dividend equivalents subject to the same vesting
restrictions as the underlying stock awards
l Clawback provision
l Minimum vesting periods on stock awards
l No recycling of shares or “liberal share counting”
practices
l No repricing of stock options without prior
shareholder approval
l No discounted stock options
2016 Annual Meeting

Deadline for shareholder proposals for inclusion in the proxy statement:    November 21, 2015
Deadline for business and nominations for director:            December 27, 2015 - January 26, 2016


5


PROPOSAL 1 - ELECTION OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF
EACH OF THE NOMINEES LISTED BELOW

Under EMC’s Bylaws, the Board of Directors may determine the total number of directors to be elected at any annual meeting of shareholders or special meeting in lieu of an annual meeting. On the recommendation of the Corporate Governance and Nominating Committee (the “Governance Committee”), the Board of Directors has nominated the 12 people named below for election as directors at this Annual Meeting, each to serve for a one‑year term or until the director’s successor is elected and qualified.
Director and Nominee Experience and Qualifications
Board Membership Criteria

The Board believes that its members, collectively, should possess diverse and complementary skills and experience in order to oversee our business and evaluate management strategy effectively. In addition, the Board believes that each director should possess certain attributes, as reflected in the Board’s membership criteria described below. Accordingly, the Board and the Governance Committee consider the qualifications of directors and director candidates individually and in the broader context of the Board’s overall composition and dynamics and EMC’s current and future needs.

The Governance Committee is responsible for reviewing, assessing and recommending Board membership criteria to the Board for approval. The criteria, which are set forth in the Governance Committee’s charter, include judgment, integrity, diversity, prior experience, the interplay of the nominee’s experience with the experience of other Board members, the extent to which the nominee would be desirable as a member of any committees of the Board, and the candidate’s willingness to devote substantial time and effort to Board responsibilities. The Governance Committee also considers service on other public company boards as this provides directors with a deeper understanding of the role and responsibilities of boards and insight into matters being handled by our Board.

In 2015, the Board amended the Governance Committee’s charter to state explicitly the Board’s commitment to actively identify and recruit diverse candidates, including women and minority candidates, as part of the search process for Board members.

The Board has determined that it is important to have individuals with the following skills and experiences:

Industry expertise, including a deep understanding of the information technology industry and the disruptive impact of new technology, or another industry that has undergone rapid growth or transformational change, to assess EMC’s strategy and long-term business plan to take advantage of the opportunities ahead.
Functional expertise in areas such as finance and accounting, talent management or marketing to support the Company’s business development and growth as well as the Board’s required committees.
International expertise, including experience attained through key leadership or management roles in a global business or responsibility for non-U.S. operations, which is important given EMC’s growth in markets around the world.
Operational experience with a business of significant scale and complexity or in an industry with continual structural change to understand the competitive dynamics of our business strategy and execution and key business processes as well as the leadership requirements and organizational dynamics driven by rapid change.

6



Proposal 1 - Election of Directors (continued)

In identifying director candidates, the Governance Committee may establish other specific skills and experience that it believes the Board should seek in order to maintain a balanced and effective Board.

At least once a year, the Governance Committee assesses the skills and experience of Board members, and compares them with those skills that might prove valuable in the future, giving consideration to the changing circumstances of the Company and the then current Board membership. This assessment enables the Board to consider whether the skills and experience described above continue to be appropriate as the Company’s needs evolve over time, the effectiveness of the Board membership criteria, and whether the Board should seek individuals with specific areas of expertise in the future. To facilitate this process, from time to time, the Governance Committee may use a critical skills matrix.
Board Evaluations

Each year, the Governance Committee, together with the Lead Director, oversees an annual evaluation process. The evaluations help inform the Governance Committee’s discussions regarding Board succession planning and refreshment, and complement the Governance Committee’s evaluation of the size and composition of the Board. The process, as described in more detail in the chart below, is as follows:

Each director evaluates the Board as a whole;
Each member of the standing committees of the Board of Directors evaluates the committees on which he or she serves; and
Each director prepares an individual self-evaluation.

After these evaluations are complete, the results are discussed by the Board and each committee, as applicable, and changes in practices or procedures are considered as necessary. The Lead Director meets with each director to discuss the individual self-evaluations and Board performance. To the extent possible, these one-on-one meetings are scheduled as in-person meetings. Among other topics, the Lead Director discusses with each director the individual’s role, the individual’s performance, committee service, and the individual’s willingness to continue serving on the Board. The Chairman discusses the Lead Director’s self-evaluation with the Lead Director, and the Governance Committee considers the Lead Director’s performance.

In 2014, this three-tier process generated robust comments and discussion at all levels of the Board, including with respect to Board refreshment and Board processes. The self-assessments also led, along with other considerations, to several changes in committee memberships, as indicated in the table below. These changes reflected the Board’s focus on director succession planning and independent oversight.

Committee
Rotated On
Rotated Off
Corporate Governance and Nominating
l James S. DiStasio
l Gail Deegan
Leadership and Compensation
l Randolph L. Cowen, Chair*
l Gail Deegan
l William D. Green
l Paul Sagan
l Michael W. Brown
l David N. Strohm
Mergers and Acquisitions
l William D. Green
l Michael W. Brown
l Paul Sagan
*
Windle B. Priem, the prior Chair of the Compensation Committee, did not stand for re-election at the 2014 Annual Meeting of Shareholders.


7



Proposal 1 - Election of Directors (continued)

A summary of the Board’s evaluation process in 2014 is set forth below.
Evaluation
By
Process
Outcome
Full Board
(Annual)
All members of
the Board
l Board members complete a detailed questionnaire which (a) provides for quantitative ratings in key areas, (b) seeks subjective comment in each of those areas and (c) solicits specific topics on which Directors would like to focus on during the Board’s discussion.
l Responses are reviewed by the Chairman and Lead Director.
l Results are discussed by the Board in an executive session chaired by the Lead Director.
l Changes in practices or procedures are considered as necessary.
Board Committees
(Annual)
All members of each committee
l Members of each committee complete a detailed questionnaire to evaluate how well their respective committee is operating.
l Results are discussed by each committee in executive session.
l The Chair of each committee reports on the committee’s discussion to the full Board.
l Changes in practices or procedures are considered as necessary.
l The Board reviews and considers any proposed changes to the committee charter.
Individual Directors (Annual)
Each Director
l Each Director completes a detailed questionnaire.
l The Lead Director receives the questionnaires.
l The Lead Director meets with each Director to discuss the individual’s performance and contributions to the Board and applicable committees.
l Lead Director discusses the results with the Governance Committee and reports summary results to the full Board.
Board Refreshment

The Board is focused on ensuring it has individuals with the right skills and experience to exercise independent judgment in overseeing our business. Accordingly, the Board pays careful attention to succession planning and refreshment for members of the Board. The Board’s process reflects both a deliberate search for specific skills and experiences, as needed, as well as opportunistic additions when high-caliber individuals become available. This practice has become a foundation of our Board’s effectiveness and, very importantly, keeps our Board energized with valuable expertise and additional perspectives. For more information, please see “Corporate Governance - Succession Planning - Board Succession” on page 41 of this Proxy Statement.

In considering incumbent directors for renomination and evaluating director candidates, the Board and the Governance Committee consider a variety of factors. These include each nominee’s independence, personal and professional accomplishments, and experience in light of the needs of the Company. For incumbent directors, the factors also include contributions to the Board, the results of the Board self-assessment process detailed above, and whether the Governance Committee believes it is in shareholders’ best interests to nominate the director for re-election.
 
 

8



Proposal 1 - Election of Directors (continued)

Board Tenure
The Board also considers the tenure of its members when evaluating its composition and nominees for election. The Board believes that varied lengths of service provide an effective balance of experience from longer-serving directors and fresh perspectives from newer directors. The average tenure of our Board members is 7.8 years and the average tenure of the independent members of our Board is 5.6 years.


Independence

A substantial majority of directors (10 of the 12 director nominees) are independent under the director independence standards of the New York Stock Exchange (the “NYSE”) and EMC’s Categorical Standards of Independence.

EMC has adopted Categorical Standards of Independence, which are available at www.emc.com/corporate/investor-relations/governance/corporate-governance.htm to assist it in assessing director independence. Pursuant to these standards, the Board broadly considers the specific standards, as well as all relevant facts and circumstances in its determination of independence of all Board members (including any relationships set forth in this Proxy Statement under the heading “Certain Transactions”). EMC’s Board of Directors has affirmatively determined that the following directors have no direct or indirect material relationship with EMC, and therefore are independent under our Categorical Standards and the NYSE listing standards: José E. Almeida, Michael W. Brown, Donald J. Carty, Randolph L. Cowen, Gail Deegan, James S. DiStasio, William D. Green, Edmund F. Kelly, Jami Miscik, Paul Sagan and David N. Strohm. In addition, the Board previously determined that Windle B. Priem, who did not stand for re-election at our 2014 Annual Meeting of Shareholders, was independent.

In determining that the above-mentioned directors are independent, the Board considered transactions during 2014 between EMC and Covidien plc (where Mr. Almeida formerly was the Chairman, President and Chief Executive Officer), between EMC and Barclays Capital (where Ms. Miscik formerly was Senior Advisor for Geopolitical Risk), and between EMC and Akamai Technologies, Inc. (where Mr. Sagan formerly was the Executive Vice Chairman), and determined that the amount of business fell below the thresholds in EMC’s Categorical Standards of Independence. These transactions include purchases and sales of goods and services in the ordinary course of business that were less than 0.5% of each company’s annual revenues. The Board also considered transactions during 2014 between EMC and companies, universities and other organizations with which Messrs. Almeida, Brown, Carty, Cowen, DiStasio, Green, Kelly, Sagan and Strohm, and Mses. Deegan and Miscik, are affiliated as directors, trustees or members of an advisory board and determined that these relationships were not material to an evaluation of these directors’ independence. Finally, the Board considered that EMC made donations to charities where Messrs. Cowen and Kelly are directors or trustees, and determined that the amount of the donations fell below the thresholds in EMC’s Categorical Standards of Independence.
Identifying Potential Director Candidates

The Governance Committee identifies Board candidates through numerous sources, including recommendations from directors, executive officers and shareholders of EMC as well as professional search firms retained from time to time to assist in identifying Board candidates. The Governance Committee seeks to identify those individuals most qualified to serve as Board members and considers many factors with regard to each candidate, including those described above. New candidates are interviewed by members of the Governance Committee and other Board members.


9



Proposal 1 - Election of Directors (continued)

EMC shareholders may recommend individuals to the Governance Committee for consideration as potential director candidates by submitting their names and appropriate background and biographical information to the Governance Committee, 176 South Street, Hopkinton, MA 01748. Assuming that the appropriate information is timely provided, the Governance Committee will consider these candidates in substantially the same manner as it considers other Board candidates it identifies. EMC shareholders may also nominate director candidates by following the advance notice provisions of EMC’s Bylaws as described under “Business and Nominations for EMC’s 2016 Annual Meeting” on page 98 of this Proxy Statement.

As part of the Governance Committee’s ongoing and active process for identifying and reviewing possible Board members, the Governance Committee considered a number of candidates in 2014-2015. This process included extensive independent search efforts as well as consideration of candidates recommended by shareholders. Candidates included Messrs. Almeida and Carty. Mr. Almeida was identified by a professional search firm retained by the Governance Committee and Mr. Carty was identified by Elliott Management, a shareholder, along with other potential candidates. The Governance Committee reviewed Messrs. Almeida and Carty’s candidacies, determined independently that they would each be an excellent fit for the Board, and recommended their appointment to the EMC Board. On January 10, 2015, after thorough evaluation of candidate qualifications in light of the EMC Board’s criteria, Messrs. Almeida and Carty were appointed to the EMC Board.

In connection with the EMC Board’s decision to add the two new Board members, Elliott has agreed to certain limited standstill and voting provisions through September 2015, including voting in favor of the Company’s proposed slate of directors at EMC’s 2015 Annual Meeting of Shareholders.
Board Meetings

During the fiscal year ended December 31, 2014, EMC’s Board of Directors held 12 meetings. All directors attended at least 75% of the Board meetings and committee meetings which were held during the period in which he or she was a director of EMC and in which he or she was a member of such committees.
Attendance at Annual Meeting of Shareholders

EMC’s Corporate Governance Guidelines provide that each director is expected to attend the Annual Meeting of Shareholders. All but two of the then current directors (9 directors) attended the 2014 Annual Meeting of Shareholders.
Nominees to Serve as Directors

The Board believes that all of the current nominees are highly qualified and have the skills and experience required for effective service on our Board. The directors’ individual biographies below contain information about their experience, qualifications and skills that led the Board to nominate them.

Each nominee has agreed to be named in this Proxy Statement and to serve if elected. Should any nominee be unable to serve or for good cause will not serve as a director, the proxy holders will vote for such other person as the Board may recommend.

All of the director nominees (other than Messrs. Almeida and Carty) were previously elected by the shareholders.

Ms. Deegan will not stand for re-election at our Annual Meeting. Accordingly, the Board has reduced the size of the Board to 12 directors, effective immediately prior to the commencement of the Annual Meeting. Our Board extends its sincere gratitude to Ms. Deegan for her many years of service. She has given generously of her time and consistently provided the Board with independent insight and advice. Her expertise in financial matters and governance has been invaluable to the Board.


10



Proposal 1 - Election of Directors (continued)

The affirmative vote of a majority of votes properly cast on this proposal at the Annual Meeting is required to elect each director.
José E. Almeida, 52

 
Director Since
l   January 2015
 
Primary Occupation
l   Former Chairman, President and Chief Executive Officer of Covidien plc
 
Other Current Public Company Boards
l   State Street Corporation
  Executive Compensation Committee
 
l   Analog Devices, Inc.

 
Former Public Company Boards (within the past 5 years)
l   Covidien plc
  Chairman of the Board
 
Business Experience
l   Covidien plc, a global healthcare products company
  Chairman (March 2012 to January 2015)
  President and Chief Executive Officer (July 2011 to January 2015)
  President, Medical Devices (October 2006 to June 2011)
 
Education
l   Bachelor’s degree in Mechanical Engineering from Escola de Engenharia Maua
 
Qualifications and Skills
 
l   As the former Chairman, President and Chief Executive Officer of Covidien, Mr. Almeida is an experienced and seasoned leader. He brings to the Board significant operating experience, experience driving international growth, and strategic leadership experience. In addition, Mr. Almeida’s service on other public company boards provides him with valuable experience.



11



Proposal 1 - Election of Directors (continued)

Michael W. Brown, 69
 
Director Since
l   August 2005
 
Primary Occupation
l   Former Vice President and Chief Financial Officer of Microsoft Corporation
 
Other Current Public Company Boards
l   VMware, Inc. (EMC holds approximately 80% economic interest in VMware)
  Chair of the Audit Committee
  Compensation and Corporate Governance Committee
 
l   Insperity, Inc.
Compensation Committee
Nominating and Corporate Governance Committee
 
l  Stifel Financial Corp.
Risk Management/Corporate Governance Committee
 
Business Experience
l   Microsoft Corporation, a manufacturer of software products for computing devices
Vice President and Chief Financial Officer (August 1994 until his retirement in July 1997)
Vice President, Finance (April 1993 to August 1994)
Treasurer (January 1990 to April 1993)
Joined Microsoft in December 1989
 
l   Former Chairman of the NASDAQ Stock Market board of directors
 
l   Past governor of the National Association of Securities Dealers
 
l   Various positions at Deloitte & Touche LLP over 18 years
 
Education
l   Bachelor’s degree in Economics from the University of Washington
 
Qualifications and Skills
 
l   Mr. Brown brings to the Board substantial financial expertise that includes extensive knowledge of the complex financial and operational issues facing large companies, and a deep understanding of accounting principles and financial reporting rules and regulations. He acquired this knowledge in the course of serving as the CFO of a global technology company, working with a major international accounting and consulting firm for 18 years, and serving as a member of the audit committees of other public company boards. Mr. Brown’s experience at Microsoft also provides insight and expertise in the rapidly changing IT industry and the impact of technology. Through many senior management positions, including as former Chairman of NASDAQ and as a past governor of the NASD, Mr. Brown has demonstrated his leadership and business acumen.

12



Proposal 1 - Election of Directors (continued)

Donald J. Carty, 68
 
Director Since
l   January 2015
 
Primary Occupation
l   Private Investor
 
Other Current Public Company Boards
l   Virgin America Inc.
  Chairman of the Board
  Audit Committee
  Chair of the Nominating and Corporate Governance Committee
 
l   Talisman Energy Inc.
Audit Committee
Chair of the Human Resources Committee
 
l  Canadian National Railway Company
Chair of the Audit Committee
Corporate Governance and Nominating Committee
Environment, Safety and Security Committee
Human Resources and Compensation Committee
Strategic Planning Committee
 

 
Former Public Company Boards (within the past 5 years)
l   Barrick Gold Corporation
 
l   Dell Inc.
 
l   Hawaiian Holdings Inc.
 
l   Gluskin Sheff and Associates
 
Business Experience
l   Dell Inc., a computer technology company
Vice Chairman and Chief Financial Officer (January 2007 to June 2008)
 
l   AMR Corporation and American Airlines
Chairman and Chief Executive Officer (1998 to 2003)
Chief Financial Officer (October 1989 to March 1995)

 
Education
l   Bachelor’s degree in Economics and Mathematics from Queen’s University in Kingston, Ontario
 
l   Honorary Doctor of Laws from Queen’s University in Kingston, Ontario
 
l   MBA from Harvard Business School
 
Qualifications and Skills
 
l   Mr. Carty is a seasoned executive who brings to the Board significant financial acumen, industry insight and strategic planning experience gained from his previous leadership positions. In addition, Mr. Carty’s service on other public company boards provides him with valuable experience.

13



Proposal 1 - Election of Directors (continued)

Randolph L. Cowen, 64
 
Director Since
l   January 2009
 
Primary Occupation
l   Former co-Chief Administrative Officer of The Goldman Sachs Group, Inc.
 
Business Experience
l   The Goldman Sachs Group, Inc., a global investment, banking, securities and investment management firm
  Co-Chief Administrative Officer (October 2007 until his retirement in November 2008)
  Global Head of Technology and Operations (September 2004 until his retirement in November 2008)
  Chief Information Officer (October 2001 to October 2007)
  Joined Goldman Sachs in 1982
 
Education
l   Bachelor’s degree in History with a minor in Mathematics from Michigan State University
 
Qualifications and Skills
 
l   With over 30 years of experience managing IT and making the technology infrastructure purchasing decisions at a global financial services firm, Mr. Cowen brings to the Board extensive knowledge about technology, the IT industry, and defining and implementing an effective IT strategy. In addition, through various senior management positions, Mr. Cowen has demonstrated leadership skills and gained significant business operations experience, including developing and managing top talent.




14



Proposal 1 - Election of Directors (continued)

James S. DiStasio, 67
 
Director Since
l   March 2010
 
Primary Occupation
l   Former Senior Vice Chairman and Americas Chief Operating Officer of Ernst & Young LLP
 
Other Current Public Company Boards
l   Northeast Utilities (d/b/a Eversource Energy)
  Chair of the Finance Committee
  Compensation Committee
  Executive Committee
 
Business Experience
l   Ernst & Young LLP, a professional services organization
Senior Vice Chairman and Americas Chief Operating Officer (January 2003 until his retirement in January 2007)
Elected as a partner in 1977
Various management positions at Ernst & Young over 38 years
 
Education
l   Bachelor’s degree in Accounting from the University of Illinois
 
Qualifications and Skills
 
l   Mr. DiStasio brings to the Board extensive financial, accounting and consulting expertise, including a deep understanding of accounting principles and financial reporting rules and regulations, acquired over the course of his 38-year career at one of the world’s leading assurance, tax, transaction and advisory services firms. He has significant experience overseeing, from an independent auditor’s perspective, the financial reporting processes of large public companies in a variety of industries with a global presence. Through his leadership roles at E&Y, including as COO of the Americas, Mr. DiStasio gained substantial management and operational experience. In addition, Mr. DiStasio’s service on another public company board provides him with valuable experience.
 



15



Proposal 1 - Election of Directors (continued)

John R. Egan, 57
 
Director Since
l   May 1992
 
Primary Occupation
l   Managing Partner and General Partner of Egan-Managed Capital
 
Other Current Public Company Boards
l   VMware, Inc. (EMC holds approximately 80% economic interest in VMware)
Chair of the Mergers and Acquisitions Committee
 
l   NetScout Systems, Inc.
Lead Independent Director
Chair of the Nominating and Governance Committee
Audit Committee
 Finance Committee
 
l   Progress Software Corporation
Non-Executive Chairman of the Board
Compensation Committee
 
l   Verint Systems Inc.
Chair of the Nominating and Governance Committee
Compensation Committee

 
Business Experience
l   Managing partner and general partner, Egan-Managed Capital, a venture capital firm (since October 1998)
 
l   EMC Corporation
Executive Vice President, Products and Offerings (May 1997 to September 1998)
Executive Vice President, Sales and Marketing (January 1992 to June 1996)
Various executive positions, including Executive Vice President, Operations and Executive Vice President, International Sales (October 1986 to January 1992)
Resigned as an executive officer in September 1998 and as an employee in July 2002
 
Education
l   Bachelor’s degree in Marketing and Computer Science from Boston College
 
Qualifications and Skills
 
l   Mr. Egan has spent his entire career in the IT industry. His broad experience ranges from venture capital investments in early-stage technology companies to extensive sales and marketing experience, to executive leadership and management roles. Mr. Egan brings to the Board business acumen, substantial operational experience, and expertise in corporate strategy development, as well as a deep understanding of EMC’s people and products acquired over many years of involvement with the Company. In addition, Mr. Egan’s service on other public company boards provides him with valuable experience.



16



Proposal 1 - Election of Directors (continued)

William D. Green, 61
 
Director Since
l   July 2013 and Lead Director since February 2015
 
Primary Occupation
l   Former Chairman of Accenture plc
 
Other Current Public Company Boards
l   McGraw Hill Financial, Inc.
Compensation and Leadership Development Committee
Nominating and Corporate Governance Committee
 
Former Public Company Boards (within the past 5 years)
l   Accenture plc
Chairman of the Board
 
Business Experience
l  Accenture plc, a global management consulting, technology services and outsourcing company
Chairman (August 2006 until his retirement in February 2013)
Chief Executive Officer (September 2004 to December 2010)
Elected as a partner in 1986
 
Education
l   Bachelor’s degree in Economics from Babson College
 
l   MBA from Babson College
 
l   Honorary Doctor of Laws from Babson College
 
Qualifications and Skills
 
l   As the former Chairman and CEO of Accenture, Mr. Green is an experienced and seasoned leader with outstanding management experience, operating experience, a deep understanding of the information technology industry and broad international business expertise. In addition, Mr. Green’s service on another public company board provides him with valuable experience.
.



17



Proposal 1 - Election of Directors (continued)

Edmund F. Kelly, 69
 
Director Since
l   August 2007
 
Primary Occupation
l   Former Chairman of Liberty Mutual Group
 
Other Current Public Company Boards
l   The Bank of New York Mellon Corporation
Chair of the Technology Committee
Human Resources and Compensation Committee
Risk Committee
 
Business Experience
l   Liberty Mutual Group, a diversified global insurer and the nation’s third-largest
property and casualty insurer
Chairman (April 2000 until his retirement in June 2013)
Chief Executive Officer (April 1998 to June 2011)
President (April 1992 to June 2010)
 
Education
l   Bachelor’s degree in Mathematics from Queen’s University in Belfast, Ireland
 
l   Ph.D. in Mathematics from the Massachusetts Institute of Technology
 
Qualifications and Skills
 
l   As the former Chairman and CEO of a Fortune 100 company, Mr. Kelly brings to the Board a wealth of complex management, worldwide operational and financial expertise. He also brings in-depth knowledge of the opportunities and challenges facing global companies. In addition, Mr. Kelly’s service on another public company board provides him with valuable experience.



18



Proposal 1 - Election of Directors (continued)

Jami Miscik, 56
 
Director Since
l   August 2012
 
Primary Occupation
l   President and Vice Chairman of Kissinger Associates, Inc.
 
Other Current Public Company Boards
l   Morgan Stanley
Operations and Technology Committee
 
Business Experience

l   President and Vice Chairman of Kissinger Associates, Inc., an international consulting firm (since January 2009)

 
l   Global Head of Sovereign Risk at Lehman Brothers, a former investment bank (June 2005 to September 2008)

 
l   Various positions at the United States Central Intelligence Agency, including Deputy Director for Intelligence (1983-2005)

 
l   Co-Chairman of the President’s Intelligence Advisory Board (member since December 2009)

 
Education
l   Bachelor’s degree in Political Science and Economics from Pepperdine University
 
l   Master’s degree in International Studies from the University of Denver
 
Qualifications and Skills
 
l   Ms. Miscik has had a long and distinguished career in the intelligence field. While at the CIA, Ms. Miscik led the analytic directorate producing the President’s daily intelligence briefings and in-depth intelligence assessments, and managed a global workforce and large budgets. Combined with her current operational experience leading an elite international consulting enterprise with clients operating around the world, Ms. Miscik has demonstrated leadership skills, global perspective, and strategic insight. She brings to the Board a unique perspective on international and government affairs, and expertise in risk analysis and geopolitics. In addition, Ms. Miscik’s service on another public company board provides her with valuable experience.




19



Proposal 1 - Election of Directors (continued)

Paul Sagan, 56
 
Director Since
l   December 2007
 
Primary Occupation
l   Executive In Residence (XIR), General Catalyst Partners
 
Other Current Public Company Boards
l   VMware, Inc. (EMC holds approximately 80% economic interest in VMware)

 
l   Akamai Technologies, Inc.
Vice Chairman of the Board
 
l   iRobot Corporation
Chair of the Nominating and Corporate Governance Committee
 
Business Experience
l   Executive In Residence (XIR), General Catalyst Partners, a venture capital firm (since January 2014)

 
l   Akamai Technologies, Inc., a provider of services for accelerating the delivery of content and applications over the Internet
 Executive Vice Chairman (January 2013 to May 2013)
Chief Executive Officer (April 2005 to January 2013)
President (October 2011 to January 2013 and May 1999 to September 2010)
Joined in October 1998 as Vice President and Chief Operating Officer
 
l   Member of the President’s National Security Telecommunications Advisory Committee (appointed by President Barack Obama in December 2010)
 
Education
l   Northwestern University’s Medill School of Journalism
 
Qualifications and Skills
 
l   As the former President and CEO of a fast-growing, industry-leading S&P 500 company, Mr. Sagan has significant experience leading a complex, international technology enterprise, extensive knowledge of internet-based technologies and business acumen. During his career, Mr. Sagan has led visionary technology and media companies and consulted with the World Economic Forum. In addition, Mr. Sagan’s service on other public company boards provides him with valuable experience.



20



Proposal 1 - Election of Directors (continued)

David N. Strohm, 66
 
Director Since
l   October 2003
 
Primary Occupation
l   Venture Partner, Greylock Partners
 
Other Current Public Company Boards
l   VMware, Inc. (EMC holds approximately 80% economic interest in VMware)
Chair of the Compensation and Corporate Governance Committee
Mergers and Acquisitions Committee
 
Former Public Company Boards (within the past 5 years)

l   Successfactors, Inc.
Chairperson of the Board
Chair of the Nominating and Corporate Governance Committee
Chair of the Compensation Committee
 
l   Imperva, Inc.
Audit Committee

 
Business Experience
l   Greylock Partners, a venture capital firm
Venture Partner (since January 2001)
General Partner (1980 to 2001)
General Partner of several partnerships formed by Greylock
 
Education
l   Bachelor’s degree from Dartmouth College
 
l   MBA from Harvard Business School
 
Qualifications and Skills
 
l   Mr. Strohm has more than 30 years of experience as an early-stage venture capital investor, principally in the information technology industry. He has been a primary investor, and served in board leadership roles, in several companies which have grown to become publicly-traded. This experience has provided him with a deep understanding of the IT industry, and the drivers of structural change and high-growth opportunities in IT. He has also gained significant experience overseeing corporate strategy, assessing operating plans, and evaluating and developing business leaders.



21



Proposal 1 - Election of Directors (continued)

Joseph M. Tucci, 67
 
Director Since
l   January 2001 and Chairman of the Board since January 2006
 
Primary Occupation
l   Chairman, President and Chief Executive Officer of EMC Corporation
 
Other Current Public Company Boards
l   VMware, Inc. (EMC holds approximately 80% economic interest in VMware)
Chairman of the Board of Directors
Mergers and Acquisitions Committee
 
l   Paychex, Inc.
Lead Independent Director
Chairman of the Governance and Compensation Committee
 
Business Experience
l   EMC Corporation
Chief Executive Officer (since January 2001)
President (January 2000 to July 2012; since February 2014)
Chief Operating Officer (January 2000 to January 2001)
 
l   Deputy Chief Executive Officer, Getronics N.V., an information technology services company (June 1999 through December 1999)
 
l   Chairman of the Board and Chief Executive Officer, Wang Global, an information technology services company (December 1993 to June 1999)
 
Education
l   Bachelor’s degree in Marketing from Manhattan College
 
l   MS in Business Policy from Columbia University
 
Qualifications and Skills
 
l   During his tenure at EMC, Mr. Tucci has led EMC through a period of dramatic transformation and revitalization, continued market share gains and sustained revenue growth. Mr. Tucci has spent more than 40 years in the technology industry in senior roles at large, complex and global technology companies. Mr. Tucci’s deep knowledge of all aspects of our business, combined with his drive for innovation and excellence, position him well to serve as our Chairman and CEO. In addition, Mr. Tucci’s service on other public company boards provides him with valuable experience.


22


PROPOSAL 2 - RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 2

EMC is asking shareholders to ratify the selection by the Audit Committee of PricewaterhouseCoopers LLP (“PwC”) as our independent auditors for the fiscal year ending December 31, 2015. The affirmative vote of a majority of votes properly cast on this proposal at the Annual Meeting is required to ratify such selection.

Although ratification by the shareholders is not required by law, the Board of Directors has determined that it is desirable to request approval of this selection by the shareholders as a matter of good corporate governance. In the event the shareholders fail to ratify the appointment of PwC, the Audit Committee will consider this factor when making any determinations regarding PwC.
Independence and Quality

As provided in the Audit Committee charter, the Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of the independent auditors for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for EMC. Each year, the Audit Committee considers whether to retain PwC and whether such service continues to be in the best interests of EMC and our shareholders. Among other things, the Audit Committee considers:
the quality and scope of the audit;
the independence of the firm;
the performance of the lead engagement partner, the number of people staffed on the engagement team, and the quality of the engagement team, including the quality of the Audit Committee’s ongoing communications with and the capability and expertise of the team;
the firm’s tenure as our independent auditor and its familiarity with our global operations and business, accounting policies and practices, and internal controls over financial reporting; and
external data relating to audit quality and performance, including recent PCAOB inspection reports available for the firm.

Based on this evaluation, the members of the Audit Committee and the Board of Directors believe that PwC is independent and that it is in the best interests of EMC and our shareholders to retain PwC to serve as our independent auditors for 2015.

The Audit Committee is also responsible for selecting the lead engagement partner. The rules of the Securities and Exchange Commission (the “SEC”) and PwC’s policies require mandatory rotation of the lead engagement partner every five years. In 2014, EMC selected a new lead engagement partner. The full Audit Committee and the Chair of the Audit Committee were directly involved in the selection of the new lead engagement partner. The process for selecting a new lead engagement partner was fulsome and allowed for thoughtful consideration of multiple candidates, each of whom met a list of specified criteria. The process included discussions between the Chair of the Audit Committee and PwC as to all of the final candidates under consideration for the position, multiple meetings with the full Audit Committee and management, and robust interviews with the final candidates.
Pre-Approval of Audit and Non-Audit Services
The Audit Committee pre-approves all audit, review and attest services performed by PwC.

23



Proposal 2 - Ratification of Selection of Independent Auditors (continued)


In accordance with the Audit Committee’s Pre-Approval Policy, the Audit Committee pre-approves specified non-audit services up to an aggregate dollar amount and approves any individual engagement in excess of $200,000. The Audit Committee has delegated to its Chair the authority to pre-approve any specific non-audit service which was not previously pre-approved by the Audit Committee, provided that any decisions of the Chair to pre-approve non-audit services shall be presented to the Audit Committee at its next scheduled meeting. There is no delegation of authority to management to pre-approve any non-audit services.

The Audit Committee has reviewed and approved the amount of fees paid to PwC for audit, audit-related, tax and all other services in 2014. During 2014, the Audit Committee also pre-approved all non-audit services in accordance with the policy set forth above. The Audit Committee considered the compensation paid to PwC for non-audit services and concluded that the provision of these services by PwC is compatible with maintaining PwC’s independence.
Fees

The Audit Committee is responsible for the overall audit fee negotiations with PwC and receives regular updates from PwC as to amounts billed to EMC.

The following table summarizes the fees PwC billed to us for each of the last two fiscal years.
 
Audit Fees1
($)
Audit-Related Fees2, 3
($)
Tax Fees3, 4
($)
All Other Fees
($)
2014
9,092,340
235,485
2,857,106
187,0005
2013
8,745,311
418,342
2,453,392
0
1 
Includes services for the audit of our financial statements and internal control over financial reporting, the review of the interim financial statements included in our quarterly reports on Form 10-Q and other professional services provided in connection with statutory and regulatory filings or engagements.
2 
Includes employee benefit plan compliance, acquisition-related support and other technical, financial reporting and compliance services.
3 
EMC engages PwC to perform audit-related and tax services where it believes there are efficiencies to using its independent auditors, who are familiar with EMC’s processes and procedures.
4 
Includes tax compliance and tax consulting services in 2014 and 2013.
5 
Includes consulting services relating to a grant application for a European Union project and preparation of our Conflict Minerals Report.

Amounts in the table above do not include the fees PwC billed to VMware, Inc.

EMC expects that representatives of PwC will be present at the Annual Meeting and will be given the opportunity to make a statement if they desire to do so and to respond to appropriate questions.

For more information about interactions between the Audit Committee and PwC, please see “Board Committees - Responsibilities - Audit Committee” and “Audit Committee Report” on pages 48 and 96, respectively, of this Proxy Statement.


24


PROPOSAL 3 - ADVISORY APPROVAL OF EXECUTIVE COMPENSATION

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 3

EMC is asking shareholders for their advisory approval of the compensation of our Named Executive Officers, as disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative in this Proxy Statement, in accordance with Section 14A of the Securities Exchange Act of 1934, as amended. This vote is commonly known as “say-on-pay.” While this vote is advisory, and not binding on us, the Compensation Committee will consider your views when determining executive compensation in the future. At our 2014 Annual Meeting of Shareholders, shareholders expressed strong support for our executive compensation program. The next annual advisory vote is expected to occur at the 2016 Annual Meeting of Shareholders.

As described in the Compensation Discussion and Analysis in this Proxy Statement, in keeping with our results-driven culture, the Compensation Committee expects our executives to deliver superior performance in a sustained fashion. As a result, a substantial portion of our executives’ overall compensation is tied to Company performance, with a substantial majority of compensation awarded in the form of equity. The Compensation Committee links compensation to the achievement of challenging short- and long-term strategic, operational and financial goals that will drive EMC to achieve profitable revenue growth and market share gains, while investing in the business to further expand the global market opportunity for our product, services and solutions portfolio. In designing our executive compensation program, the Compensation Committee focuses on promoting our business strategy and aligning the interests of our executives with those of EMC shareholders.

For more information on our executive compensation program, see “Compensation Discussion and Analysis” and “Compensation of Executive Officers” beginning on pages 54 and 77, respectively, of this Proxy Statement.




25


PROPOSAL 4 - APPROVAL OF THE EMC CORPORATION AMENDED AND RESTATED 2003 STOCK PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 4

On May 7, 2003, EMC shareholders adopted and approved the EMC Corporation 2003 Stock Plan, which was subsequently amended and restated and most recently approved by shareholders on May 1, 2013 (the “2003 Stock Plan”). In February 2015, the Compensation Committee and the Board of Directors approved, subject to approval by EMC shareholders, an amendment and restatement of the 2003 Stock Plan (attached as Exhibit A to this Proxy Statement), which would, among other things:
increase the number of shares of common stock available for grant under the plan by 40,000,000;
eliminate the fungible share counting plan provision with respect to equity granted or cancelled after
April 30, 2015;
extend the expiration date of the plan to April 30, 2025; and
make certain other administrative changes.
The affirmative vote of a majority of the votes properly cast on this proposal at the Annual Meeting is required to approve this amendment and restatement of the 2003 Stock Plan.
Equity is a key component of our compensation program. EMC grants equity awards to key employees, consultants, advisors and non-employee directors to achieve our strategic objectives by:
providing them with motivation to achieve our financial goals;
promoting retention through the use of multi-year vesting schedules;
encouraging loyalty;
fostering alignment with the interests of EMC shareholders; and
providing incentives that are competitive with those of companies with which EMC competes for talent.
If additional shares are not made available under the 2003 Stock Plan, we will not be able to grant any awards to participants once all the current shares have been allocated. EMC estimates, based on historical grants, that the availability of an additional 40,000,000 shares under the 2003 Stock Plan plus the existing shares available would provide a sufficient number of shares to enable EMC to continue to make awards at historical average annual rates for the next three years.
Key Data
As of December 31, 2014, a total of 41,086,066 shares remained available for future awards under the 2003 Stock Plan.
As of December 31, 2014, EMC and its subsidiaries had approximately 70,000 employees, non-employee directors, consultants and advisors who are eligible to be considered for awards under the 2003 Stock Plan. The following table sets forth information regarding outstanding equity awards (including awards under the 2003 Stock Plan and our prior stock option plans and options assumed by EMC in connection with acquisitions) and shares available for future equity awards under the 2003 Stock Plan as of December 31, 2014 (without giving effect to approval of the proposed amendment and restatement of the 2003 Stock Plan):
Total shares underlying outstanding stock options
40,439,097

Weighted average exercise price of outstanding stock options
$
12.68

Weighted average remaining contractual life of outstanding stock options
3.10


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Proposal 4 - Amended and Restated 2003 Stock Plan (continued)






Total shares underlying outstanding unvested time-based restricted stock and restricted stock unit awards
45,088,904
Total shares underlying outstanding unearned performance-based restricted stock and restricted stock unit awards
7,701,546
Total shares currently available for grant
41,086,066
Company Considerations
When approving the proposed amendment and restatement of the 2003 Stock Plan, the Board of Directors and the Compensation Committee considered various factors, including potential dilution, burn rate, overhang and historical grant practices. EMC measures dilution as the total number of shares subject to equity awards granted less cancellations and other shares returned to the reserve, divided by total common shares outstanding at the end of the year. The potential dilution from the proposed increase in the share reserve under the 2003 Stock Plan is 2.02%, based on the total common shares outstanding as of December 31, 2014. Our annual dilution under the 2003 Stock Plan and our prior stock option plans and options assumed by EMC in connection with acquisitions for fiscal 2014 was 1.32%.
We actively manage our long-term dilution by limiting the number of shares subject to equity awards that we grant annually, commonly expressed as a percentage of total shares outstanding and referred to as burn rate. Burn rate is another measure of dilution that shows how rapidly a company is depleting its shares reserved for equity compensation plans, and differs from annual dilution because it does not take into account cancellations and other shares returned to the reserve. We have calculated the burn rate under the 2003 Stock Plan and our prior stock option plans and options assumed by EMC in connection with acquisitions for the past three years, as set forth in the following table:
Time Period
Options Granted1
Full-Value
Shares Granted
Total Granted =
Options + Adjusted
Full-Value Shares2
Weighted Average
 Number of Common
Stock Outstanding
Burn Rate
Fiscal 2014
0
23,193,060
69,579,180
2,027,956,235
3.43%
Fiscal 2013
0
20,290,083
60,870,249
2,073,999,975
2.93%
Fiscal 2012
861,378
21,451,279
65,215,215
2,093,372,100
3.12%
1 
These numbers do not include options assumed in connection with corporate acquisitions.
2 
Adjusted Full-Value Shares equals Full-Value Shares multiplied by three (3), which factor is determined based on the burn rate policies of Institutional Shareholder Services Inc. (ISS).
The three-year average burn rate is 3.16%.
An additional metric that we use to measure the cumulative impact of our equity program is overhang (number of shares subject to equity awards outstanding but not exercised or settled, plus number of shares available to be granted, divided by total common shares outstanding at the end of the year). Our overhang as of December 31, 2014 was 6.77%. If the 2003 Stock Plan is approved, our overhang as of that date would increase to 8.78%.
The following are the factors that were material to the evaluation by the Board of Directors and Compensation Committee in determining acceptable and targeted levels of dilution: the current and future accounting expense associated with our equity award practices; competitive grant practices of our compensation peer group companies; and the policies of shareholder advisory firms. Our equity programs are revisited at least annually and assessed against these (and other) measures.
Promotion of Good Corporate Governance Practices
The 2003 Stock Plan, as proposed to be amended and restated, provides for the following:
Stock options and stock appreciation rights may not have a term in excess of ten years, may not be granted at a discount to the fair market value of our common stock on the grant date, and, other than in connection with a change in EMC’s capitalization, may not be repriced without shareholder approval or cancelled and re-granted

27



Proposal 4 - Amended and Restated 2003 Stock Plan (continued)






or exchanged for cash or a new award with a lower (or no) exercise price at a time when the exercise price of an option is above the fair market value of a share of common stock;
To the extent shareholder approval is required by law or the rules of any stock exchange or market or quotation system on which EMC common stock is traded, listed or quoted, no material amendments to the plan may be made without shareholder approval;
Restricted stock and restricted stock unit awards have minimum vesting periods;
Shares retained by or delivered to the Company to pay the exercise price of a stock option or withholding taxes in connection with an award, unissued shares resulting from the settlement of stock appreciation rights in common stock and shares purchased by us in the open market using the proceeds of stock option exercises do not become available for issuance as future awards;
Dividend and dividend equivalent payments (if any) on restricted stock and/or restricted stock unit awards, including performance awards and time-based awards, are subject to the same vesting restrictions as the underlying awards;
EMC may cancel outstanding awards or “clawback” the value of awards recently realized if officers or other senior employees engage in activity detrimental to EMC; and
Awards made under the plan may qualify as “performance-based compensation” under Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the “Code”).
Section 162(m) of the Code
The Board of Directors believes that it is in the best interests of the Company and its shareholders to provide for an incentive plan under which stock-based compensation awards made to the Company’s executive officers can qualify for deductibility by the Company for federal income tax purposes. Accordingly, the 2003 Stock Plan has been structured in a manner such that awards under it can satisfy the requirements for “performance-based” compensation within the meaning of Section 162(m). In general, under Section 162(m), in order for the Company to be able to deduct compensation in excess of $1 million paid in any one year to the Company’s Chief Executive Officer or any of the Company’s three other most highly compensated executive officers (other than the Company’s Chief Financial Officer), such compensation must qualify as “performance-based.” One of the requirements of “performance-based” compensation for purposes of Section 162(m) is that the material terms of the performance goals under which compensation may be paid be disclosed to and approved by the Company’s shareholders. For purposes of Section 162(m), the material terms include (1) the employees eligible to receive compensation, (2) a description of the business criteria on which the performance goal is based and (3) the maximum amount of compensation that can be paid to an employee under the performance goal. With respect to the various types of awards under the 2003 Stock Plan, each of these aspects is discussed below, and shareholder approval of the 2003 Stock Plan will be deemed to constitute approval of each of these aspects of the 2003 Stock Plan for purposes of the approval requirements of Section 162(m). Although shareholder approval is one of the requirements for exemption under Section 162(m), even with shareholder approval there can be no guarantee that compensation will be treated as exempt “performance-based” compensation under Section 162(m). Furthermore, the Compensation Committee will continue to have authority to provide compensation that is not exempt from the limits on deductibility under Section 162(m).
Summary of the 2003 Stock Plan
The following is a summary of the material terms and conditions of the 2003 Stock Plan, as proposed to be amended and restated. This summary is qualified in its entirety by reference to the terms of the 2003 Stock Plan (as proposed to be amended and restated), a copy of which is attached as Exhibit A to this Proxy Statement.
The closing price of a share of EMC common stock on the New York Stock Exchange (the “NYSE”) on February 27, 2015 was $28.94. The proceeds received by EMC upon exercise of the awards by participants in the 2003 Stock Plan will be used for the general corporate purposes of EMC.


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Proposal 4 - Amended and Restated 2003 Stock Plan (continued)






Administration. The Compensation Committee and/or the Board of Directors administer the 2003 Stock Plan, which includes approving:
the individuals to receive awards;
the types of awards to be granted;
the terms and conditions of the awards, including the number of shares and exercise price of the awards;
the time when the awards become exercisable or will vest, or the restrictions to which an award is subject will lapse; and
whether options will be incentive stock options.
The Compensation Committee and the Board of Directors have full authority to interpret the terms of the 2003 Stock Plan and awards granted under the 2003 Stock Plan. The Compensation Committee or the Board of Directors may, in their discretion, determine to accelerate the vesting or lapse of one or more restrictions with respect to an award; provided, however, that neither the Compensation Committee nor the Board of Directors may accelerate the vesting or lapse of one or more restrictions with respect to an award of restricted stock or restricted stock units if such action would cause such award to fully vest in a period of time that is less than the applicable minimum vesting period set forth in the 2003 Stock Plan.
Authorized Shares. If the proposed amendment and restatement of the 2003 Stock Plan is approved by shareholders at the Annual Meeting, the maximum number of shares of common stock that may be delivered in satisfaction of awards granted under the 2003 Stock Plan will be the sum of (a) 460,000,000, (b) the number of shares available for grant under the EMC Corporation 1985 Stock Option Plan, the EMC Corporation 1992 Stock Option Plan for Directors, the EMC Corporation 1993 Stock Option Plan, and the EMC Corporation 2001 Stock Option Plan (the “Prior Plans”) as of May 2, 2007, and (c) the number of shares subject to outstanding awards under the Prior Plans as of May 2, 2007 to the extent such awards are canceled, expired, forfeited or otherwise not issued on or after May 3, 2007 without the delivery of shares.
The shares authorized under the 2003 Stock Plan will be subject to adjustment in the event of a stock dividend, stock split or other change in corporate structure or capitalization affecting the common stock. Prior to this amendment and restatement of the 2003 Stock Plan, the 2003 Stock Plan contained a fungible share limit, which means that stock options and stock appreciation rights were counted against the share reserve as one share for every share that was issued in connection with such award and that “full-value” awards (i.e., restricted stock and restricted stock units) were counted against the share reserve as two shares for every share that was issued in connection with such award. This amendment and restatement of the 2003 Stock Plan removes the fungible share counting with respect to awards granted or cancelled after April 30, 2015. In addition, as described above, the 2003 Stock Plan does not contain liberal share counting. As a result, any shares actually or constructively transferred by the participant to EMC in connection with an award under the 2003 Stock Plan or our Prior Plans (including, but not limited to, through the holding back of shares for tax withholding) will not be added back to the share reserve under the 2003 Stock Plan.
Common stock delivered by the Company under the 2003 Stock Plan may consist of authorized but unissued common stock or previously issued common stock acquired by the Company.
Tax Code Limitations. Subject to changes in the Company’s capitalization, the aggregate number of shares subject to awards granted under the 2003 Stock Plan during any fiscal year to any one participant will not exceed 2,000,000. The maximum number of shares under an award that may be granted to any participant for a performance period longer than one fiscal year will not exceed 2,000,000 multiplied by the number of full fiscal years in the performance period. If this amendment and restatement of the 2003 Stock Plan is approved, subject to changes in the Company’s capitalization, the aggregate number of shares that may be issued under the 2003 Stock Plan as of April 30, 2015 pursuant to the exercise of incentive stock options may not exceed 10,000,000.
Eligibility. All employees of, and consultants or advisors to, EMC or any of its subsidiaries are eligible to participate in the 2003 Stock Plan. Each non-employee director who is not a 5% shareholder of EMC or a person in control of such a shareholder (an “Eligible Director”) is also eligible to participate in the 2003 Stock Plan. Options

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Proposal 4 - Amended and Restated 2003 Stock Plan (continued)






intended to qualify as incentive stock options within the meaning of Section 422 of the Code only may be granted to employees of EMC or of any parent or subsidiary corporation.
Types of Awards. Awards under the 2003 Stock Plan may be in the form of stock options (either incentive stock options or non-qualified options), restricted stock, restricted stock units, stock appreciation rights or any combination thereof.
Stock Options. Stock options represent the right to purchase shares of common stock within a specified period of time at a specified price. The exercise price for a stock option will be not less than 100% (110% for an incentive stock option granted to a 10% or more shareholder) of the fair market value of common stock on the date of grant. All stock options will expire no more than ten years (five years in the case of an incentive stock option granted to a 10% or more shareholder) after the date of grant. A participant holding stock options will have no voting rights and will have no rights to receive dividends or dividend equivalents with respect to such stock options or any shares subject to such stock options until the participant is the holder of record of such shares.
Awards of Restricted Stock and Restricted Stock Units. Restricted stock is common stock that is subject to a risk of forfeiture or other restrictions that will lapse upon satisfaction of specified conditions. Restricted stock units represent the right to receive shares of common stock in the future, with the right to future delivery of the shares subject to a risk of forfeiture or other restrictions that will lapse upon satisfaction of specified conditions. Subject to any restrictions applicable to the award, a participant holding restricted stock, whether vested or unvested, will be entitled to enjoy all rights of a shareholder with respect to such restricted stock, including the right to receive dividends and vote the shares. Any dividends payable on the restricted stock awards, including performance awards and time-based awards, will be subject to the same restrictions as the underlying award. A participant holding restricted stock units is not entitled to voting or other shareholder rights, but, subject to any restrictions applicable to the award, will be entitled to receive dividend equivalents. Any dividend equivalents payable on the restricted stock unit awards, including performance awards and time-based awards, will be subject to the same restrictions as the underlying award. Awards of restricted stock or restricted stock units, other than awards granted to Eligible Directors, will not vest fully in less than two years following the date of grant, but awards that vest upon the achievement of performance goals or that are granted upon the over-achievement of performance goals will not vest fully in less than one year following the date of grant.
Stock Appreciation Rights. Stock appreciation rights entitle the holder upon exercise to receive shares of common stock having a value equal to the excess of (i) the value of the number of shares with respect to which the right is being exercised (which value is based on fair market value at the time of such exercise) over (ii) the exercise price applicable to such shares. The exercise price for a stock appreciation right will not be less than 100% of the fair market value of common stock on the date of grant. All stock appreciation rights will expire no later than ten years after the date of grant.
Performance Goals. The Compensation Committee may grant awards under the 2003 Stock Plan subject to the satisfaction of performance goals. In the case of awards intended to qualify for exemption under Section 162(m) of the Code, the Compensation Committee will use one or more objectively determinable performance goals that relate to one or more performance criteria. The performance criteria available under the 2003 Stock Plan may consist of any or any combination of the following areas of performance (determined either on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, geographical, project, product or individual basis or in combinations thereof, and measured on an absolute basis or relative to a pre-established target, to previous periods’ results or to a designated comparison group): sales; revenues; assets; expenses; income; profit margins; earnings before or after any deductions and whether or not on a continuing operations or an aggregate or per share basis; return on equity, investment, capital or assets; inventory; organizational realignments; infrastructure changes; one or more operating ratios; borrowing levels, leverage ratios or credit rating; market share; capital expenditures; cash flow; stock price; shareholder return; sales of products or services; customer acquisition or retentions; acquisitions or divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs, split ups and the like; reorganizations; strategic investments or recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings. The Compensation Committee will determine whether the performance goals for a performance award have been met. No more than 2,000,000 shares will be allocated

30



Proposal 4 - Amended and Restated 2003 Stock Plan (continued)






to performance awards granted to any participant during any 12-month period; provided that for awards with performance periods that are longer than one year, the maximum number of shares allocated to such award cannot exceed 2,000,000 shares multiplied by the number of full years in the performance period.
Deferral Payments. Subject to the terms and conditions of the 2003 Stock Plan, the Compensation Committee may determine that the settlement of all or a portion of any award may be deferred or may, in its sole discretion, approve deferral elections made by participants.
Transferability. Under the 2003 Stock Plan, awards are generally non-transferable other than by will or by the laws of descent and distribution, and awards may only be exercised by the participant during his or her lifetime; provided, that the Compensation Committee may, other than with respect to incentive stock options, allow for transferability of awards to immediate family members of the participant or to trusts, partnerships or other entities controlled by and of which the beneficiaries are immediate family members of the participant.
Termination of Service Relationship. Under the 2003 Stock Plan, except as set forth below, all previously unvested awards, and vested but unexercised Incentive Stock Options, terminate and are forfeited automatically upon the termination of the participant’s service relationship with EMC, unless the Compensation Committee expressly specifies otherwise. However, if a participant’s service relationship is terminated by reason of death or disability, all awards previously issued under the plan to the participant will become fully vested and, to the extent applicable, remain exercisable for three years after the date of termination (but in no event beyond the expiration date of the award). If a participant’s service relationship is terminated by reason of retirement (as defined in the 2003 Stock Plan), except as otherwise provided by the Compensation Committee, all stock options and stock appreciation rights held by the participant will continue to vest and be exercisable as if the service relationship had not terminated and without regard to the satisfaction of any applicable performance-based vesting criteria. Awards of restricted stock and restricted stock units held by the participant will terminate on the date of retirement. If a participant holds unexercised non-qualified stock options or unexercised stock appreciation rights that are vested at the time his or her service relationship is terminated, other than for death, disability or retirement, then such awards may continue to be exercised until the earlier to occur of (1) the expiration of the award term or (2) three months following the date the participant’s service relationship is terminated; provided, however, if the participant’s employment is terminated for “Cause” or if the participant engaged in “Detrimental Activity” (each as defined in the 2003 Stock Plan), all awards held by the participant shall immediately terminate.
With respect to awards held by officers or other senior employees, the Compensation Committee may cancel, suspend or otherwise limit any unexpired award and rescind the exercise of an award if such participant engages in “Detrimental Activity” (as defined in the 2003 Stock Plan).
Amendments. The Compensation Committee may at any time discontinue granting awards under the 2003 Stock Plan. The Compensation Committee may amend the 2003 Stock Plan, except that no amendment may adversely affect the rights of any participant without his or her consent and no amendment will, without the approval of EMC shareholders, to the extent required by law or the rules of any stock exchange or market or quotation system on which EMC common stock is traded, listed or quoted, materially amend the 2003 Stock Plan, increase the number of shares of common stock available under the 2003 Stock Plan, change the group of persons eligible to receive awards, other than in connection with a change in EMC’s capitalization, reduce the exercise price of a previously awarded option or stock appreciation right, or at any time when the exercise price of a previously awarded option or stock appreciation right is above the fair market value of a share of common stock, cancel and re-grant or exchange such option or stock appreciation right for cash or a new award with a lower (or no) exercise price, extend the time within which awards may be granted, or alter the 2003 Stock Plan so that options intended to qualify as incentive stock options under the Code would not do so, provided that no participant consent shall be required if the Committee or Board of Directors determines in its sole discretion that such amendment or alteration is required or advisable in order for the Company, the Plan or the Award to satisfy any law or regulation or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard.
Change in Corporate Structure or Capitalization; Change in Control. In the event of a stock dividend, stock split or other change in corporate structure or capitalization affecting the common stock, the number and kind of shares of stock or securities of EMC then subject to the 2003 Stock Plan and the awards then outstanding or to be granted

31



Proposal 4 - Amended and Restated 2003 Stock Plan (continued)






thereunder, and the exercise price, if applicable, will be equitably adjusted by the Compensation Committee, whose determination will be binding on all persons. In the event of a dissolution, liquidation, consolidation or merger in which EMC is not the surviving corporation or in which a majority of its outstanding shares are converted into securities of another corporation or are exchanged for other consideration, all outstanding awards will thereupon terminate, provided that prior to the effective date of any such dissolution, liquidation, consolidation or merger, EMC will either (i) contingent upon the consummation of such transaction, make all outstanding awards immediately exercisable on a basis that gives the holder of the award a reasonable opportunity to participate as a shareholder in the transaction or, if applicable, cause all restrictions to lapse, or (ii) arrange to have the surviving corporation grant replacement awards to participants.
Term. The 2003 Stock Plan, unless sooner terminated by the Compensation Committee or the Board of Directors, will remain in effect until April 30, 2025.
U.S. Federal Income Tax Consequences
The following is a brief description of the federal income tax treatment that will generally apply to awards made under the 2003 Stock Plan, based on federal income tax laws currently in effect. The exact federal income tax treatment of awards will depend on the specific nature of any such award and the individual tax attributes of the award recipient. This summary is not intended to be a complete analysis and discussion of the federal income tax treatment of the 2003 Stock Plan, and does not discuss gift or estate taxes or the income tax laws of any municipality, state or foreign country.
Incentive Stock Options. Options granted under the 2003 Stock Plan may qualify as incentive stock options within the meaning of Section 422 of the Code. If an option holder exercises an incentive stock option in accordance with its terms and does not dispose of the shares acquired within two years from the date of the grant of the incentive stock option or within one year from the date of exercise (the “Required Holding Periods”), an option holder generally will not recognize ordinary income and the Company will not be entitled to any deduction, on either the grant or the exercise of the incentive stock option. An option holder’s basis in the shares acquired upon exercise will be the amount paid upon exercise. Provided an option holder holds the shares as a capital asset at the time of sale or other disposition of the shares, an option holder’s gain or loss, if any, recognized on the sale or other disposition will be capital gain or loss. The amount of an option holder’s gain or loss will be the difference between the amount realized on the disposition of the shares and the option holder’s basis in the shares. The gain or loss will be long-term capital gain or loss if the shares are held for at least one year after exercise of the option; otherwise, it will be short-term.
If, however, an option holder disposes of the acquired shares at any time prior to the expiration of the Required Holding Periods, then, subject to certain exceptions, the option holder will recognize ordinary income at the time of such disposition which will equal the excess, if any, of the lesser of (1) the amount realized on such disposition or (2) the fair market value of the shares on the date of exercise, over the option holder’s basis in the shares. The Company generally will be entitled to a deduction in an amount equal to the amount of ordinary income recognized by an option holder. Any gain in excess of such ordinary income amount will be a short-term or long-term capital gain, depending on the option holder’s holding period. If an option holder disposes of such shares for less than the option holder’s basis in the shares, the difference between the amount realized and the option holder’s basis will be short-term or long-term capital loss, depending upon the holding period of the shares.
Non-Qualified Stock Options. Options granted under the 2003 Stock Plan which are not incentive stock options are “non-qualified stock options.” No income results upon the grant of a non-qualified stock option. When an option holder exercises a non-qualified stock option, he or she will realize ordinary income subject to withholding. Generally, such income will be realized at the time of exercise and in an amount equal to the excess, measured at the time of exercise, of the then fair market value of the common stock over the option price. EMC will generally be entitled to a deduction for Federal income tax purposes equal to the amount of ordinary income realized by the option holder, subject to certain withholding and reporting requirements.
Restricted Stock. Generally, restricted stock is not taxable to a participant at the time of grant, but instead is included in ordinary income (at its then fair market value) and subject to withholding when the restrictions lapse. A participant may elect to recognize income at the time of grant, in which case the fair market value of the common stock

32



Proposal 4 - Amended and Restated 2003 Stock Plan (continued)






at the time of grant is included in ordinary income and subject to withholding and there is no further income recognition when the restrictions lapse. EMC is entitled to a tax deduction for Federal income tax purposes in an amount equal to the ordinary income recognized by the participant.
Restricted Stock Units. Generally, the participant will not be subject to tax upon the grant of an award of restricted stock units. However, upon the receipt of the underlying shares of common stock, the participant will recognize ordinary income subject to withholding in an amount equal to the fair market value of the shares received. EMC will be entitled to a corresponding tax deduction for Federal income tax purposes.
Stock Appreciation Rights. Generally, the participant will not be subject to tax upon the grant of a stock appreciation right. However, upon the receipt of shares pursuant to the exercise of a stock appreciation right, the participant, generally, will recognize ordinary income subject to withholding in an amount equal to the fair market value of the shares received. The ordinary income recognized with respect to the receipt of shares upon exercise of stock appreciation rights will be subject to any necessary withholding and reporting requirements.
Generally, EMC will not be entitled to a tax deduction upon the grant or termination of stock appreciation rights. However, EMC will, generally, be entitled to a deduction for Federal income tax purposes equal to the amount of ordinary income realized by the participant.
Section 162(m). The 2003 Stock Plan is designed to allow awards made under the plan to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, however there can be no guarantee that amounts payable under the 2003 Stock Plan will be treated as qualified “performance-based” compensation under Section 162(m). In general, under Section 162(m), in order for EMC to be able to deduct compensation in excess of $1,000,000 paid in any one year to EMC’s Chief Executive Officer or any of EMC’s three other most highly compensated executive officers (other than EMC’s Chief Financial Officer), such compensation must qualify as “performance-based”. However, the rules and regulations promulgated under Section 162(m) are complicated and subject to change from time to time, sometimes with retroactive effect. In addition, a number of requirements must be met in order for particular compensation to so qualify. As such, there can be no assurance that any compensation awarded or paid under the 2003 Stock Plan will be deductible under all circumstances.
Section 409A. Awards held by employees that are subject to but fail to comply with Section 409A of the Code are subject to a penalty tax of 20% in addition to ordinary income tax, as well as to interest charges. In addition, the failure to comply with Section 409A may result in an acceleration of the timing of income inclusion for income tax purposes. The Compensation Committee intends to administer any award resulting in a deferral of compensation subject to Section 409A consistent with the requirements of Section 409A to the maximum extent possible, as determined by the Compensation Committee.
This summary is not a complete description of the U.S. Federal income tax aspects of the 2003 Stock Plan. Moreover, this summary relates only to Federal income taxes; there may also be Federal estate and gift tax consequences associated with the 2003 Stock Plan, as well as foreign, state and local tax consequences.
New Plan Benefits
The future benefits or amounts that would be received under this amendment and restatement of the 2003 Stock Plan are discretionary and are therefore not determinable at this time. Similarly, the benefits or amounts which would have been received by or allocated to executive officers and our other employees for the last completed fiscal year if this amendment and restatement of the 2003 Stock Plan had been in effect cannot be determined. Information about awards granted in fiscal year 2014 to the Chief Executive Officer, the Chief Financial Officer and the other Named Executive Officers can be found under the “Grants of Plan-Based Awards” table on page 80 of this Proxy Statement.



33


PROPOSAL 5 - SHAREHOLDER PROPOSAL

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” PROPOSAL 5

John Chevedden, acting as proxy for James McRitchie, and certain other EMC shareholders have proposed the adoption of the following proposal at the Annual Meeting and have furnished the following statement in support of the proposal.  The address of Mr. McRitchie is 9295 Yorkship Court, Elk Grove, CA 95758 and he has represented to EMC that he held 200 shares of common stock as of October 17, 2014; the names, addresses and number of shares of common stock held by each other shareholder will be provided promptly upon request to the Secretary of EMC.  If properly presented at the meeting, the affirmative vote of a majority of the votes properly cast on this proposal at the Annual Meeting is required to approve this proposal.

Proposal 5 - Independent Board Chairman

RESOLVED: The shareholders request the Board of Directors to adopt as policy, and amend the bylaws as necessary, to require the Chair of the Board of Directors, whenever possible, to be an independent member of the Board. The Board would have the discretion to phase in this policy for the next CEO transition, implemented so it did not violate any existing agreement. If the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chair.

Supporting Statement:
The role of the CEO and management is to run the company. The role of the Board of Directors is to provide independent oversight of management and the CEO. There is a potential conflict of interest for a CEO to be her/his own overseer as Chair while managing the business.

The combination of these two roles in a single person weakens a corporation’s governance structure, which can harm shareholder value.

And with the Board working on a succession plan for Mr. Tucci’s retirement, a rare opportunity exists to make this change.

As Intel’s former chair Andrew Grove stated, “The separation of the two jobs goes to the heart of the conception of a corporation. Is a company a sandbox for the CEO, or is the CEO an employee? If he’s an employee, he needs a boss, and that boss is the Board. The Chairman runs the Board. How can the CEO be his own boss?”

Shareholders are best served by an independent Board Chair who can provide a balance of power between the CEO and the Board empowering strong Board leadership. The primary duty of a Board of Directors is to oversee the management of a company on behalf of shareholders. A combined CEO / Chair creates a potential conflict of interest, resulting in excessive management influence on the Board and weaker oversight of management.

Numerous institutional investors recommend separation of these two roles. For example, California’s Retirement System CalPERS’ Principles & Guidelines encourage separation, even with a lead director in place.

Chairing and overseeing the Board is a time intensive responsibility. A separate Chair also frees the CEO to manage the company and build effective business strategies.

Many companies have separate and/or independent Chairs. An independent Chair is the prevailing practice in the United Kingdom and many international markets and is an increasing trend in the U.S.

34



Proposal 5 - Shareholder Proposal (continued)

Shareholder resolutions urging separation of CEO and Chair received approximately 31% vote, in 2013 and 2014 with a 37% vote at EMC. This proposal won 50% plus support at five major U.S. companies in 2013.

Please vote to enhance shareholder value:
Independent Board Chairman - Proposal 5

35



Proposal 5 - Shareholder Proposal (continued)

EMCS STATEMENT IN OPPOSITION TO SHAREHODLER PROPOSAL

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” PROPOSAL 5

The Board of Directors has considered this proposal and unanimously concluded that its adoption is not in the best interests of EMC or its shareholders. In reaching its decision, the Board considered a number of factors, including:

The Board’s annual review of its leadership structure, including whether to separate the Chairman and CEO roles, and whether the Chairman should be an independent director;
The inflexible nature of the proposal, which limits the Board’s ability to choose the most effective leadership structure, particularly in the context of market and business conditions;
The strong independent oversight provided by EMC’s current corporate governance policies and leadership structure; and
Feedback received from our shareholders on our Board leadership structure.

Our Board believes EMC and our shareholders are best served by governance policies, including an annual review of the leadership structure, that provide the Board flexibility to determine the most effective leadership structure for EMC based on market and business conditions. The Board believes that strong, independent Board leadership is a critical aspect of effective corporate governance and that an important role of the Board is determining the optimal way to structure such leadership. Consistent with this view, under our Corporate Governance Guidelines, the Board reviews its leadership on an annual basis, and in the past has adopted structures including both combined and separate chairman and CEO positions. Based on this experience, the Board believes it is important to maintain the flexibility it currently has to tailor its leadership structure based on the Company’s needs and the Board’s assessment of its leadership at different points in time.

After its most recent annual review of its leadership structure, our Board determined that the current arrangement best serves the interests of EMC shareholders and the Company. The IT industry is experiencing one of the most disruptive periods in its history, and the pace of change is accelerating. The Board believes that a combined Chairman and CEO, overseen by an experienced, highly-independent Board, is critical at this time for EMC to maintain strong alignment of the business and management with the Board’s central, strategic vision. This structure facilitates quick response times and clear, direct channels of feedback between business leaders and the Board. For more information about the Board’s annual review process, please see “Corporate Governance - Annual Review of Leadership Structure” beginning on page 38 of this Proxy Statement.

Our Board has established strong, independent oversight through our corporate governance structure, Board composition and Board leadership. We have adopted a very robust independent Lead Director role which provides enhanced oversight of the executive management team, and ensures that the Board remains firmly in control of critical strategic decisions. The Board believes that a Lead Director is an integral part of our Board structure and facilitates the effective performance of the Board in its role of providing governance and independent oversight. For more information about the Lead Director’s extensive duties, please see our discussion on the Lead Director role beginning on page 39 of this Proxy Statement.

William D. Green was designated by the Board as independent Lead Director in February 2015. He has substantial experience leading a large public corporation, governance expertise from serving as chairman and a member of other company boards and committees, and a deep understanding of the IT industry. In addition, Mr. Green’s proven ability to assert independent leadership while working collaboratively with other directors, his ability to solicit, balance and build consensus around different points of view, and the respect he has garnered among our Board members will enable him to serve effectively as our Lead Director.

36



Proposal 5 - Shareholder Proposal (continued)

Furthermore, 10 out of the 12 director nominees for our Board are independent. The independent directors appropriately challenge management and demonstrate independent judgment in making important decisions for our Company. In addition, the Board meets in executive session without the CEO in connection with each regularly scheduled Board meeting. We also note that the Board recently appointed two new directors to incorporate fresh, independent perspectives.

Each of the Board’s key committees is also comprised entirely of independent directors. As a result, oversight of key matters, such as the integrity of EMC’s financial statements, the nomination of directors and evaluation of the Board and its committees, and executive compensation, is entrusted to independent directors.

For more information on our independent directors, please see “Proposal 1 - Election of Directors” beginning on page 6 of this Proxy Statement.

Our Board and management has evaluated feedback from our shareholders, and a significant majority are supportive of the current structure. A similar proposal was put to a vote at our 2014 Annual Meeting, and approximately 63% of our shareholders voted AGAINST the proposal. EMC engaged with many of our largest shareholders, as well as the proponents of this proposal, both before and after the vote to solicit feedback. Our discussions with shareholders indicated that a significant majority of them believe our current leadership structure to be appropriate based on the current market and business environment and, in particular, were strongly supportive of our robust independent Lead Director role.
FOR THESE REASONS, YOUR BOARD OF DIRECTORS BELIEVES THAT THIS
PROPOSAL IS NOT IN THE BEST INTERESTS OF EMC OR OUR SHAREHOLDERS
AND RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL.


37


CORPORATE GOVERNANCE

EMC is committed to good corporate governance, which we believe helps us to sustain our success and build long-term value for our shareholders. For many years, we have had in place Corporate Governance Guidelines that provide a framework for the effective governance of EMC. The Governance Committee reviews these guidelines at least annually and, as appropriate, recommends changes to the Board of Directors for approval. We also have written charters for the Board of Directors’ standing committees (Audit, Compensation, Finance, Governance, and Mergers and Acquisitions), as well as Business Conduct Guidelines applicable to all directors, officers and employees. Information about EMC’s corporate governance practices and copies of the Corporate Governance Guidelines, committee charters and Business Conduct Guidelines are available at www.emc.com/corporate/investor-relations/governance/corporate-governance.htm. EMC posts additional information on its website from time to time as the Board makes changes to EMC’s corporate governance practices.

The Board of Directors has implemented corporate governance practices that it believes are both in the best interests of EMC and its shareholders as well as compliant with the rules and regulations of the SEC and the listing standards of the NYSE. The Board reviews these practices on an ongoing basis. Highlights of our corporate governance practices as summarized below.
Board Leadership Structure

Our Bylaws and Corporate Governance Guidelines permit the roles of Chairman and Chief Executive Officer to be filled by the same or different individuals. This provides the Board with the flexibility to determine whether the two roles should be combined or separated based upon our needs and the Board’s assessment of its leadership from time to time.
Annual Review of Leadership Structure

The Board reviews the structure of its leadership on an annual basis and determines each year whether it is best for the Company that (a) the Chairman role be combined or separated from the CEO role and (b) whether the Chairman should be an independent director. Among other things, the Board considers:
the Company’s strategic positioning;
the Company’s challenges;
industry dynamics;
the experience of the then current CEO;
the qualifications of directors who could serve as Chairman; and
any relevant legislative or regulatory developments.

Current Structure. For the reasons set forth below, the Board believes that EMC and its shareholders are best served at this time by having Joseph M. Tucci serve as our Chairman and CEO, and William D. Green, an independent director, serve as our Lead Director.

Federation Strategy. Our Federation model is unique in the industry and a competitive differentiator. Under our Federation operating model, we have created three distinct businesses: EMC Information Infrastructure, Pivotal Software and VMware Virtual Infrastructure. These businesses are led by three chief executive officers, David I. Goulden, Pat Gelsinger and Paul Maritz, respectively. Mr. Tucci is Chairman at all three businesses. This structure enables each business to focus on their specific business objectives while also allowing for collaboration to offer solutions across the technology stack. The Board believes that the Company needs one leader to guide the overall vision

38



Corporate Governance (continued)

of the Federation and ensure the companies’ strategies are aligned with that adopted by the Board. Mr. Tucci is the key day-to-day link and conduit for feedback between the Board and management under our Federation operating model.

Accountability. Combining the roles of Chairman and CEO also makes clear that we have a single leader who is directly accountable to the Board and, through the Board, to our shareholders. It establishes one voice who speaks for the Company to customers, employees, shareholders and other stakeholders. It strengthens the Board and the Board’s decision-making process because Mr. Tucci, who has first-hand knowledge of our operations and the major issues facing EMC, chairs the Board meetings where the Board discusses strategic and business issues. Finally, the combined roles facilitate a Board process that is able to identify and respond to challenges and opportunities in a more timely and efficient manner than a non-executive chairman structure would provide.

Independent Lead Director. The Board recognizes the importance of having a strong independent board leadership structure to ensure accountability. Accordingly, our Corporate Governance Guidelines provide that if the Chairman is not an independent director, then the independent directors will select a Lead Director. The Board believes that a Lead Director is an integral part of our Board structure and facilitates the effective performance of the Board in its role of providing governance and independent oversight.

Annually, the independent directors consider the role and designation of the Lead Director.

In February 2015, after its annual review, the independent directors designated Mr. Green as the Board’s independent Lead Director. He has substantial experience leading a large public corporation, governance expertise from serving as chairman and a member of other company boards and committees, and a deep understanding of the IT industry. In addition, Mr. Green’s proven ability to assert independent leadership while working collaboratively with other directors, his ability to solicit, balance and build consensus around different points of view, and the respect he has garnered among our Board members will enable him to serve effectively as our Lead Director. For more information regarding Mr. Green, please see “Proposal 1 - Election of Directors”, and for information on Mr. Green’s perspective on his roles and responsibilities as Lead Director, please see his letter to shareholders at the beginning of the Proxy Statement.
Our Lead Director has significant responsibilities, which are set forth in EMC’s Corporate Governance Guidelines. These include:
l
Presiding at the meetings of the Board at which the Chairman is not present, including the executive sessions of the non-management directors and independent directors, establishing the agendas for such executive sessions and providing appropriate feedback to the CEO regarding these meetings
l
Acting as a liaison between the independent directors and the Chairman
l
Facilitating discussions among the independent directors on key issues and concerns outside of Board meetings
l
Having the authority to call meetings of the independent directors
l
Approving information sent to the Board, including providing for the quality, quantity and timeliness of the flow of information from management that is necessary for the independent directors to effectively and responsibly perform their duties
l
Approving meeting agendas for the Board
l
Approving meeting schedules to assure that there is sufficient time for discussion of all agenda items
l
In collaboration with the Compensation Committee, approving CEO goals, evaluating CEO performance, setting CEO compensation levels and reviewing CEO succession planning
l
In collaboration with the Governance Committee, making recommendations to the Board regarding committee members and chairs and overseeing the performance evaluations of the Board, each of the applicable committees and the individual directors
l
In collaboration with the Chairman, recommending to the Board the retention of consultants who report directly to the Board


39



Corporate Governance (continued)

l
If requested by major shareholders, ensuring that he or she is available for consultation and direct communication
l
Performing such other duties as may be requested from time to time by the Board as a whole or by the independent directors


Independent Directors and Committees. In evaluating its leadership structure, the Board also considered that a substantial majority of our Board is comprised of independent directors. Our independent directors appropriately challenge management and demonstrate independent judgment in making important decisions for our Company. In addition, each of the Board’s key committees - the Audit Committee, Compensation Committee, and Governance Committee - is comprised entirely of independent directors. As a result, oversight of key matters, such as the integrity of EMC’s financial statements, the nomination of directors and evaluation of the Board and its committees, and executive compensation, is entrusted exclusively to independent directors. Finally, the Board meets in executive session without the CEO in connection with each regularly scheduled Board meeting. The active involvement of the independent directors, combined with the qualifications and significant responsibilities of our Lead Director, promote strong, independent oversight of EMC’s management and affairs.
Risk Oversight

The Board of Directors is responsible for overseeing risk management at the Company. The Board regularly considers our risk profile when reviewing our overall business plan and strategy and when making decisions impacting the Company.

The Governance Committee is responsible for overseeing the Board’s execution of its risk management oversight responsibility. The management risk committee, comprised of the Chief Financial Officer, the General Counsel, and the Chief Risk Officer, monitors and manages EMC’s enterprise risk management program and reports directly to the Governance Committee and the Board of Directors.
Compensation Risk Oversight

The Leadership and Compensation Committee oversees the design and implementation of and the incentives and risks associated with our compensation policies and practices. In 2014, the Committee evaluated our executive compensation program across the following categories: compensation mix, including the relative weightings of our executive officers’ base salaries, cash incentive bonus opportunities and long‑term equity incentives; long-term incentive plan design; short-term incentive plan design; performance metrics; the relationship between performance and payout, including maximum payouts; stock ownership guidelines; stock holding guidelines; change in control agreements; and compensation recovery policy. The Committee considered several factors that mitigate risk in the executive compensation program, including the following:
Approximately 12% of the Named Executive Officers’ total target annual compensation opportunity is provided through the cash bonus plans. These plans contain limits on the amount of compensation that can be earned for any year. Moreover, EMC incents executives through multiple cash bonus plans with multiple performance targets that are weighted differently under each plan;
The majority of EMC’s executive compensation opportunity is provided in the form of a portfolio of equity awards with multiple performance targets and multi-year vesting schedules of up to four years, subject to continued employment with EMC, to provide strong incentives for sustained performance and sustained shareholder value;
For many years, EMC has been committed to pay-for-performance. In line with this philosophy, the Committee grants equity awards with performance elements to focus executive officers on achieving strategic, operational and financial goals that will lead to long-term shareholder value and encourage our executive officers to take a long-term view of the business;

40



Corporate Governance (continued)

The annual financial targets used in the compensation program align with the Board-approved operating plan for the Company;
EMC has strong stock ownership guidelines which help align the interests of our executive officers with shareholders’ interests in the long-term performance of EMC stock;
In addition to stock ownership guidelines, EMC has strong stock holding guidelines under which each executive officer must hold throughout the year at least 75% of his or her total equity holdings (measured as of January 1). In addition, each executive officer may sell only a limited number of shares each quarter;
EMC has a long-standing clawback policy addressing the recovery of cash and equity incentive compensation applicable to all EMC employees;
EMC does not permit any employees to “hedge” ownership of EMC securities and executive officers may not pledge EMC securities;
EMC’s change in control agreements provide severance payments and vesting of equity awards on a “double trigger” basis;
The independent compensation consultant for the Committee only provides services for the Committee and is not permitted to provide any services to the Company unless pre-approved by the Committee; and
The Committee has final authority in administering the executive compensation program.

The management risk committee also reviewed all of EMC’s incentive compensation plans. The management risk committee considered whether any of these plans or programs may encourage inappropriate risk-taking; whether any plan may give rise to risks that are reasonably likely to have a material adverse effect on the Company; and whether it would recommend any changes to the plans. The management risk committee also considered our plans’ risk-mitigating controls, such as our clawback policy and stock ownership and holding guidelines. The management risk committee presented its conclusions for review by the Compensation Committee.
Additional Risk Oversight

In addition, each of the other standing committees of the Board regularly assesses risk in connection with executing their responsibilities. The Audit Committee discusses with management EMC’s major financial risks and exposures and the steps management has taken to monitor and control such risks and exposures, including our policies with respect to risk assessment and risk management. The Mergers and Acquisitions Committee considers risks in connection with acquisitions, divestitures and investments. The Finance Committee considers risks in connection with matters related to the Company’s capital structure, stock repurchase program and investment management policy. The Audit Committee and Governance Committee also receive regular reports from the Company’s Chief Risk Officer.

All of the committees report regularly to the Board of Directors on their activities. For more information, please see “Board Committees” beginning on page 47 of this Proxy Statement.
Succession Planning

We engage in succession planning at all levels of the Company.
Board Succession

The Governance Committee regularly evaluates the size and composition of the Board, giving consideration to evolving skills, perspective and experience needed on the Board to perform its governance role and provide oversight as the challenges facing the Company change over time. The Governance Committee and the Board of Directors regularly consider succession plans for membership of the Board committees and committee chairs as well as the needs of the

41



Corporate Governance (continued)

Board on an ongoing basis. For more information, please see “Proposal 1 - Election of Directors - Director and Nominee Experience and Qualifications” on page 6 of this Proxy Statement.
CEO Succession

The Board and the Leadership and Compensation Committee are both engaged in CEO succession planning on an ongoing basis. They regularly review CEO succession in plenary session and executive session. This includes regular review of both long- and short-term CEO succession plans, consideration of candidates, review and monitoring of the career development of potential successors, and consideration of the Company’s needs in light of its strategic direction. The Board also ensures that it has exposure to senior officers who have the potential to succeed the CEO and other senior management positions.
Organizational Talent Review

We have a robust organization and talent review process to ensure that we have a strong pipeline of qualified, ready, high-potential employees to fill key leadership and other roles, both now and in the future.

The EMC executive leadership team meets several times a year to jointly review and discuss:

The strategy and goals of each executive’s group in the context of EMC’s overall strategy;
Each group’s structure, including talent strengths and any gaps; and
The plan for each group to ensure that the talent and skills for key roles are available in order to drive business success.

The EMC executive leadership team also discusses, both as part of these meetings and throughout the year:

Key roles and succession plans for those roles, both currently and in the future;
Top talent across the Company, including strengths, weaknesses and development needs;
Executive performance and promotions; and
Talent development programs and strategies.

The Leadership and Compensation Committee reviews the results of these discussions and engages in talent management and succession planning discussions throughout the year.

The Board also regularly discusses management succession throughout the year.
Annual Election of Directors

Each director is elected annually.
Majority Vote for Directors

A majority vote standard, as described in our Bylaws, applies to the election of directors. In addition, our Corporate Governance Guidelines require any incumbent nominee for director, other than in a Contested Election Meeting (as defined in our Bylaws), who does not receive more votes cast “for” his or her election than votes cast “against” his or her election to promptly tender his or her resignation. The Governance Committee will assess the appropriateness of the director continuing to serve and recommend to the Board the action to be taken regarding a tendered resignation. Set forth below are procedures of the Board and Governance Committee to be used if such majority vote policy is triggered:


42



Corporate Governance (continued)

In considering whether it is appropriate for a nominee to continue to serve as a director, the Governance Committee will act promptly and consider all factors deemed relevant, including any known reasons why shareholders voted “against” the director, the length of service and qualifications of the director in question, the director’s contributions to EMC, the director’s particular area of expertise or experience, and compliance with listing standards.

The Board will act on the Governance Committee’s recommendation promptly, but in any event not later than 90 days following the certification of the shareholder vote. The Board will consider the factors considered by the Governance Committee and any other factors it deems relevant. Board action may include acceptance of the tendered resignation, adoption of measures designed to address the issues underlying the “against” votes for such director or rejection of the tendered resignation. Following the Board’s decision, EMC will promptly disclose the Board’s decision and process (including, if applicable, the reasons for rejecting the tendered resignation) in a periodic or current report filed with the SEC.

If a director’s resignation is accepted by the Board, the Board will determine whether to fill such vacancy or to reduce the size of the Board.

The process described above of determining whether or not to accept a tendered resignation will be managed by the independent directors. Further, any director who tenders his or her resignation pursuant to EMC’s majority vote policy will not participate in the Governance Committee recommendation or Board consideration regarding whether or not to accept the tendered resignation. If a majority of the members of the Governance Committee receive more votes cast “against” than “for” at the same election, then the independent directors who are on the Board who did not receive such votes will consider the tendered resignations.
Executive Sessions of Directors

The non-management directors meet in executive session in connection with each regularly scheduled Board meeting, and the independent directors meet in executive session at least once each year. The Lead Director acts as presiding director for such executive sessions.
Shareholder Engagement

For many years, EMC has sponsored a robust shareholder engagement program. We are committed to engaging in constructive and meaningful dialogue with our shareholders. We value shareholder views and insights and believe that positive, two-way dialogue builds informed relationships that promote transparency and accountability. Over the years, shareholders have expressed appreciation of our engagement program.

While the EMC Board of Directors, through the Governance Committee, oversees shareholder matters and participates in meetings with shareholders as appropriate, management has the principal responsibility for shareholder communications and engagement. Management provides regular updates to the Board concerning shareholder feedback. The Board considers shareholder perspectives as well as the interests of all stakeholders when overseeing company strategy, formulating governance practices and designing compensation programs.

During 2014, members of EMC’s Board of Directors and management dialogued and met with shareholders and other stakeholders as part of our annual outreach program as well as at other times throughout the year. We spoke with representatives from our top institutional investors, mutual funds, public pension funds, labor unions and socially focused funds (representing approximately 36% of our outstanding shares). Topics discussed included our strategy and performance; corporate governance matters such as Board composition and refreshment, succession planning and Board leadership structure; our executive compensation program; and sustainability initiatives. We solicited feedback from shareholders on these subjects and provided a summary of responses to the Board. Directors who participated in the meetings also shared their perspectives on these meeting with the full Board.

43



Corporate Governance (continued)

In 2014, the Lead Director also met in person and spoke by telephone with various shareholders to discuss Board diversity. The Board appreciated shareholders’ input and willingness to dialogue on this issue. In 2015, the Board amended the Governance Committee’s charter to strengthen our public statements and more clearly state our commitment to Board diversity. The Governance Committee’s charter now states that the Committee, acting on behalf of the Board, will actively identify and recruit diverse candidates, including women and minority candidates, as part of the search process for Board members (for more information, please see “Proposal 1 - Election of Directors - Director and Nominee Experience and Qualifications” on page 6 of this Proxy Statement).

For information on shareholder feedback about our executive compensation programs, please see “Compensation Discussion and Analysis - Executive Summary” beginning on page 54 of this Proxy Statement.
Communications with the Board

To facilitate open communications, EMC provides various means for shareholders and other interested parties to contact the non-management directors, the Audit Committee and the Leadership and Compensation Committee. The Board strives to provide clear, candid and timely responses to any substantive communication it receives. In order to build constructive, informed relationships with shareholders and encourage transparency and accountability, directors may also be available for dialogue with shareholders from time to time, as appropriate, and the Lead Director is available for consultation and direct communication if requested by major shareholders. In addition to these communications, it is the Board’s policy in accordance with our Corporate Governance Guidelines to provide a response to any shareholder proposal that receives a majority vote.

Information on how EMC shareholders and all other interested parties may report concerns or complaints to the Audit Committee, Leadership and Compensation Committee and the non-management directors is set forth below and at www.emc.com/corporate/investor-relations/governance/contact-board.htm.

Concerns or complaints about EMC’s accounting, internal accounting controls, auditing or financial matters can be sent directly to the Audit Committee in either of the following ways:
By mail
EMC Audit Committee
c/o Alertline
PMB 3767
Suite 300
13950 Ballantyne Corporate Place
Charlotte, NC 28277
By e-mail
AuditCommitteeChairman@emc.com
Questions or concerns about compensation matters can be sent directly to the Leadership and Compensation Committee in either of the following ways:
By mail
EMC Leadership and Compensation Committee
c/o Alertline
PMB 3767
Suite 300
13950 Ballantyne Corporate Place
Charlotte, NC 28277
By e-mail
CompensationCommitteeChairman@emc.com
Communications can be sent directly to the non-management directors in either of the following ways:
By mail
EMC Non-Management Directors
c/o Alertline
PMB 3767
Suite 300
13950 Ballantyne Corporate Place
Charlotte, NC 28277
By e-mail
nonmngtdirectors@emc.com


44



Corporate Governance (continued)

Communications received electronically will be accessed directly by, and communications received by mail will be forwarded directly to, the Audit Committee and the Leadership and Compensation Committee, as appropriate. Communications addressed to the non-management directors will be accessed directly by or forwarded directly to the Governance Committee. The committees will forward these communications to other directors, members of EMC management or such other persons as they deem appropriate. The committees or, if appropriate, EMC management, will respond in a timely manner to any substantive communications from a shareholder or an interested party. This process has been approved by our independent Directors.
Director Orientation and Continuing Education

The Board believes that director orientation and education is integral to Board and committee performance and effectiveness. The Board’s director orientation program emphasizes EMC’s business and strategic plans, and includes site visits, presentations and meetings with management. In addition, management, outside advisors and others regularly provide continuing education to the Board on topics such as current regulatory matters, legislative affairs, and developments within the IT industry. Directors are also encouraged to participate in external educational programs related to their responsibilities as directors and to EMC’s business.
Director Stock Ownership Guidelines

The Board believes that non-management directors should hold a significant equity interest in EMC. We have had director stock ownership guidelines in place for many years. Under these guidelines, each non-management director is expected to own, within five years after becoming a director, shares of EMC common stock with a value equal to five times the annual Board retainer, excluding any committee retainers or fees. As of February 27, 2015, all of the non-management directors are in compliance with these guidelines. We also have executive stock ownership guidelines (for more information, please see “Compensation Discussion and Analysis - Stock Ownership Guidelines” on page 74 of this Proxy Statement).
Sustainability

The Governance Committee is responsible for overseeing EMC’s sustainability efforts which are founded on the principle that virtually all business decisions have economic, environmental, and social implications. We believe that integrating these considerations into our business strategy and decisions is integral to growing the success of EMC and benefits our shareholders, employees, customers, suppliers and communities. We seek ways to use our technology and engage our talent to create prosperity, maximize value and provide for the well-being of our shareholders, the planet and society. We strive to maximize our positive impact by focusing on those issues where EMC has the greatest potential to create positive change, holding ourselves accountable by measuring and reporting our progress, maintaining open and candid communication with our internal and external stakeholders, and collaborating with our peer companies and those in our value chain to expand the scale of our contributions. By developing sustainable business practices and incorporating principles of sustainability in our product design, we create competitive advantage, build trust and pave the way for continued long-term corporate success.

In 2014, our sustainability program was recognized through inclusion in the Dow Jones Sustainability Index for North America and the CDP Climate Disclosure Leadership Index. We also announced a new mid-term target for reduction of absolute greenhouse gas emissions, along with a number of other corporate targets for 2020. For more information on our priorities and progress, please see our Annual Report on Form 10-K for 2014, our Sustainability Report and www.emc.com/corporate/sustainability/index.htm.




45



Corporate Governance (continued)

Political Contributions

The Governance Committee oversees our political spending activity. We participate in the political process to help shape public policy and address legislation that impacts EMC and our industry. Our involvement aims to ensure that the interests of our customers, shareholders, employees and other stakeholders are fairly represented at all levels of government. Our corporate political contributions, membership dues we pay to major U.S. trade associations and the percentage of such dues that is used for political spending, and activity of the EMC Political Action Committee (which is funded entirely by voluntary employee contributions and no corporate funds) are disclosed on our website. For more information, including a description of our public policy priorities, please see http://www.emc.com/corporate/sustainability/delivering-value/public.htm.
Simple Majority Vote

There are no supermajority voting requirements in our Articles of Organization or Bylaws.



46


BOARD COMMITTEES

The Board of Directors has established five standing committees: the Audit Committee, the Governance Committee, the Finance Committee, the Leadership and Compensation Committee, and the Mergers and Acquisitions Committee.
Independence

The Audit, Compensation, and Governance Committees consist entirely of independent directors. All of the members of the Audit Committee and Compensation Committee meet the additional, heightened independence criteria of the SEC and NYSE applicable to their respective committees.
Composition

Generally, a director is a member of no more than two of the NYSE required committees (Audit, Compensation, and Governance Committees).

The current membership of each committee is listed below.
 
Audit
Corporate Governance and Nominating
Finance
Leadership and Compensation1
Mergers and Acquisitions
José E. Almeida
 
 
ü
ü
 
Michael W. Brown
ü
 
Chair
 
 
Donald J. Carty
 
ü
 
 
 
Randolph L. Cowen
 
 
 
Chair
ü
Gail Deegan
ü
 
 
ü
 
James S. DiStasio
Chair
ü
 
 
 
John R. Egan
 
 
ü
 
Chair
William D. Green
 
 
 
ü
ü
Edmund F. Kelly
 
 
ü
 
 
Jami Miscik
 
Chair
 
 
 
Paul Sagan
 
 
 
ü
 
David N. Strohm
 
ü
 
 
ü
Joseph M. Tucci
 
 
ü
 
ü
1 
Michael W. Brown and David N. Strohm served on the Leadership and Compensation Committee until February 6, 2014, and Windle B. Priem, who did not stand for re-election at the 2014 Annual Meeting of Shareholders, served on the Leadership and Compensation Committee until April 30, 2014.
Responsibilities

Each committee operates pursuant to a written charter that is available on our website at www.emc.com/corporate/investor-relations/governance/corporate-governance.htm. All the committees meet periodically throughout the year, report on their actions and recommendations to the Board, receive reports from senior management, annually evaluate their performance, and have the authority to retain outside advisors.


47



Board Committees (continued)

Audit Committee
Other Members:  Michael W. Brown and Gail Deegan

Meetings Held in 2014: 12

Primary Responsibilities:  This committee assists the Board of Directors in overseeing the integrity of EMC’s financial statements, and reviews with management and EMC’s auditors EMC’s financial statements, the accounting principles applied in their preparation, the scope of the audit, any issues raised by the auditors regarding EMC’s financial statements and its accounting controls and procedures, EMC’s risk assessment and risk management policies,
James S. DiStasio
Chair
EMC’s worldwide corporate compliance program, the independence of EMC’s auditors, EMC’s internal controls, EMC’s policy pertaining to related person transactions, the other matters as set forth in its charter, and such other matters as the committee deems appropriate. During 2014, senior members of EMC’s financial and legal management participated in each of the Audit Committee’s regularly scheduled meetings. During the course of the year, the Audit Committee had separate executive sessions with EMC’s General Counsel (who is also our chief compliance officer) and Chief Financial Officer, independent auditors and internal auditors at which candid discussions regarding legal matters, our corporate compliance program, financial reporting, internal controls and accounting systems and processes took place. The Audit Committee discussed with EMC’s internal and independent auditors the overall scope and plans for their respective audits. The Audit Committee also met on a regular basis without members of management or the Company’s independent auditors. Also during 2014, the Audit Committee reviewed with senior members of management EMC’s policies and practices regarding risk assessment and risk management. In addition, the Audit Committee reviewed the adequacy and effectiveness of EMC’s legal, regulatory and ethical compliance programs, including our Business Conduct Guidelines.

Financial Experts: The Board of Directors has determined, in accordance with the rules of the NYSE and the SEC, that each member is financially literate and an “audit committee financial expert.”

For more information about the Audit Committee, please see “Proposal 2 - Ratification of Selection of Independent Auditors” and “Audit Committee Report” on pages 23 and 96, respectively, of this Proxy Statement.

Corporate Governance and Nominating Committee
Other Members:  Donald J. Carty, James S. DiStasio and David N. Strohm

Meetings Held in 2014: 8

Primary Responsibilities:  This committee oversees and advises the Board on corporate governance matters and assists the Board in identifying and recommending qualified Board candidates. The Governance Committee also reviews and makes recommendations to the Board on the size and composition of the Board, standards to be applied by the Board in making
Jami Miscik
Chair
independence determinations, assignments to committees of the Board and resignations of directors, when appropriate. The Governance Committee oversees the evaluation of the Board, the committees and individual directors and monitors possible conflicts of interest of directors and senior executives. In addition, the Governance Committee oversees the Board’s execution of its risk management oversight responsibility, including receiving reports from the management risk committee, oversees and makes recommendations to the Board regarding shareholder proposals and sustainability matters, and reviews Federation governance.


48



Board Committees (continued)

Finance Committee
Other Members:  José E. Almeida, John R. Egan, Edmund F. Kelly and Joseph M. Tucci

Meetings Held in 2014: 5

Primary Responsibilities:  This committee helps the Board fulfill its responsibilities relating to oversight of the Company’s financial affairs. The Finance Committee oversees and reviews with management matters related to the enhancement of the capital structure of EMC and its subsidiaries, including the issuance and restructuring of EMC’s equity and debt, issuance
Michael W. Brown
Chair
of our subsidiaries’ equity (including the equity of VMware, Inc. (“VMware”)), the redemption of any of EMC’s bonds or convertible notes which may be outstanding from time to time, EMC’s investment management policy, any common stock repurchase or VMware Class A common stock purchase programs which may exist from time to time, and EMC’s dividend policy.

Leadership and Compensation Committee
Other Members:  José E. Almeida, Gail Deegan, William D. Green and Paul Sagan

Meetings Held in 2014: 8

Primary Responsibilities:  This committee sets EMC’s executive compensation philosophy and objectives, recommends compensation for non-employee directors, sets the compensation of the Chairman and CEO, reviews and approves the goals and objectives relevant to the compensation of the Chairman and CEO and evaluates his performance, including his performance relative to
Randolph L. Cowen
Chair
his respective goals and objectives as well as his overall performance. The Compensation Committee also reviews and approves the compensation of EMC’s other executive officers, oversees the incentives and risks associated with the Company’s compensation policies and practices, and oversees regulatory compliance of compensation matters. For more information on compensation risk oversight, please see “Corporate Governance - Risk Oversight” on page 40 of this Proxy Statement. The Compensation Committee annually reviews EMC’s equity plans, approves grants under EMC’s equity plans and has the authority to administer and interpret the provisions of EMC’s equity, deferred compensation, 401(k) and other plans. The Compensation Committee also oversees and reports to the Board on succession planning for the CEO and other senior management positions.

The Compensation Committee incorporates certain metrics that are part of EMC’s operating plan into the compensation program for EMC’s executive officers. The Board of Directors approves EMC’s operating plan. Accordingly, in this regard, while the Compensation Committee establishes our executive compensation program, the Board of Directors also is involved in executive compensation. Subject to compensation parameters approved by the Compensation Committee, Joseph M. Tucci, our CEO, and David I. Goulden, CEO, EMC Information Infrastructure, set the performance goals under our business unit incentive compensation plans. These goals are aligned with EMC’s operating plan. In addition, Messrs. Tucci and Goulden, subject to compensation parameters approved by the Compensation Committee, may approve the individual performance goals under our Executive Management by Objectives Plan, to the extent such goals are not otherwise set by the Compensation Committee. Messrs. Tucci and Goulden also present recommendations regarding the compensation of our executive officers to the Compensation Committee for approval. The Executive Vice President, Human Resources, assists Messrs. Tucci and Goulden in performing their compensation-related responsibilities and also assists the Compensation Committee in fulfilling its functions.

Compensation Consultant: The Compensation Committee has engaged Towers Watson & Co. (“Towers Watson”) as its compensation consultant. Towers Watson works at the direction of the Compensation Committee and reports directly to the Compensation Committee. For more information, please see “Compensation Discussion and Analysis - Role of Compensation Consultant” on page 75 of this Proxy Statement.


49



Board Committees (continued)

Compensation Committee Interlocks and Insider Participation: None of the Compensation Committee members has ever been an officer or employee of EMC. None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has an executive officer serving as a member of our Board or Compensation Committee.

For more information on the Compensation Committee’s responsibilities and our compensation program, please see “Corporate Governance” and “Compensation Discussion and Analysis” beginning on pages 38 and 54, respectively, of this Proxy Statement.
Mergers and Acquisitions Committee
Other Members:  Randolph L. Cowen, William D. Green, David N. Strohm and Joseph M. Tucci

Meetings Held in 2014: 8

Primary Responsibilities:  This committee reviews and approves (or recommends that the Board approve) potential acquisitions, divestitures and investments. The Mergers and Acquisitions Committee also evaluates the execution, financial results and integration of completed acquisition transactions.

John R. Egan
Chair




50


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information about the beneficial ownership of common stock owned on February 27, 2015 (except as otherwise indicated) (i) by each person who is known by EMC to own beneficially more than 5% of the common stock, (ii) by each of EMC’s directors and nominees for director, (iii) by each of the Named Executive Officers (as defined below) and (iv) by all directors and executive officers of EMC as a group.
Name of Beneficial Owner
Number of Shares Beneficially Owned1
Percent of Outstanding Shares
BlackRock, Inc.
114,423,5512
5.8%
The Vanguard Group
109,553,6353
5.5%
José E. Almeida4, 5*
0
**
Michael W. Brown4, 6*
127,600
**
Jeremy Burton4, 7
60,632
**
Donald J. Carty4*
20,000
**
Randolph L. Cowen4, 8*
67,600
**
Gail Deegan4, 9
89,100
**
James S. DiStasio4, 10*
47,600
**
John R. Egan4*
1,132,817
**
Howard D. Elias4, 11
645,177
**
David I. Goulden4, 12
708,119
**
William D. Green4*
8,833
**
Edmund F. Kelly4, 13*
97,600
**
Jami Miscik4*
16,825
**
Zane C. Rowe4, 5
0
**
Paul Sagan4, 14*
87,600
**
William F. Scannell4, 15
99,249
**
David N. Strohm4, 16*
297,601
**
Joseph M. Tucci4, 17*
2,724,077
**
All directors and executive officers as a group (24 persons)18
7,763,626
**
* Nominee for director
**
Less than 1%

1
Except as otherwise noted, all persons have sole voting and investment power of their shares. All amounts shown in this column include shares obtainable upon exercise of stock options currently exercisable or exercisable within 60 days of February 27, 2015.
2
Based solely on the Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 2, 2015. The Schedule 13G/A provides that, as of December 31, 2014, BlackRock, Inc. beneficially owns in the aggregate 114,423,551 shares of common stock and that it has sole power to vote or direct the voting of 91,348,979 of such shares and sole power to dispose or direct the disposition of 114,423,551 of such shares. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10022.
3
Based solely on the Schedule 13G filed by The Vanguard Group with the SEC on February 11, 2015. The Schedule 13G provides that, as of December 31, 2014, The Vanguard Group beneficially owns in the aggregate 109,553,635 shares of common stock and that it has sole power to vote or direct the voting of 3,506,344 of such shares, sole power to dispose or direct the disposition of 106,244,075 of such shares and shared power to dispose or direct the disposition of 3,309,560 of such shares. The address of The Vanguard Group is 100 Vanguard Boulevard, Malvern, PA 19355.
4
Does not include restricted stock units held by the following individuals: Mr. Almeida (3,100); Mr. Brown (9,300); Mr. Burton (587,316); Mr. Carty (3,100); Mr. Cowen (9,300); Ms. Deegan (9,300); Mr. DiStasio (9,300); Mr. Egan (9,300); Mr. Elias (542,068); Mr. Goulden (809,707); Mr. Green (9,300); Mr. Kelly (9,300); Ms. Miscik (9,300); Mr. Rowe (389,955); Mr. Sagan

51



Security Ownership of Certain Beneficial Owners and Management (continued)

(9,300); Mr. Scannell (542,068); Mr. Strohm (9,300); and Mr. Tucci (815,609). The restricted stock units held by Messrs. Almeida, Brown, Carty, Cowen, DiStasio, Egan, Green, Kelly, Sagan and Strohm and Mses. Deegan and Miscik will vest on April 30, 2015.
5
Under our stock ownership guidelines, Messrs. Almeida and Rowe each have five years to reach compliance with their respective guidelines.
6
Mr. Brown is deemed to own 50,000 of these shares by virtue of options to purchase these shares.
7
Mr. Burton is deemed to own 58,502 of these shares by virtue of options to purchase these shares.
8
Mr. Cowen is deemed to own 20,000 of these shares by virtue of options to purchase these shares.
9
Ms. Deegan is deemed to own 40,000 of these shares by virtue of options to purchase these shares.
10
Mr. DiStasio is deemed to own 10,000 of these shares by virtue of options to purchase these shares.
11
Mr. Elias is deemed to own 336,237 of these shares by virtue of options to purchase these shares.
12
Mr. Goulden is deemed to own 422,573 of these shares by virtue of options to purchase these shares.
13
Mr. Kelly is deemed to own 30,000 of these shares by virtue of options to purchase these shares.
14
Mr. Sagan is deemed to own 30,000 of these shares by virtue of options to purchase these shares.
15
Mr. Scannell is deemed to own 98,909 of these shares by virtue of options to purchase these shares.
16
Mr. Strohm is deemed to own 40,000 of these shares by virtue of options to purchase these shares.
17
Mr. Tucci is deemed to own 1,557,743 of these shares by virtue of options to purchase these shares.
18
Includes 3,424,024 shares of common stock beneficially owned by all executive officers and directors as a group by virtue of options to purchase these shares. Excludes shares as to which such individuals have disclaimed beneficial ownership. Excludes 5,451,324 restricted stock units held by all executive officers and directors as a group.



EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth certain information regarding EMC’s equity compensation plans as of December 31, 2014 (table in millions, except per share amounts).
Plan Category
Number of securities
to be issued upon exercise of outstanding options,
warrants and rights1
(a)
Weighted-average exercise price per share of outstanding options, warrants and rights1
(b)
Number of securities remaining available for future issuance under
equity compensation plans (excluding securities reflected in column (a))
(c)
Equity compensation plans approved by security holders
30
$16.26
662
Equity compensation plans not approved by security holders
Total
30
$16.26
66
1
Does not include an aggregate of 10 million shares of common stock to be issued (subject to vesting) upon the exercise of outstanding options, with a weighted-average exercise price of $1.74 per share, assumed by EMC in connection with various acquisitions. The option plans relating to such outstanding options were approved by the respective security holders of the acquired companies.
2
Includes 25 million shares of common stock available for future issuance under our Amended and Restated 1989 Employee Stock Purchase Plan.



52



LEADERSHIP AND COMPENSATION COMMITTEE REPORT

The Leadership and Compensation Committee of EMC has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Leadership and Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.


LEADERSHIP AND COMPENSATION COMMITTEE

Randolph L. Cowen, Chair
José E. Almeida
Gail Deegan
William D. Green
Paul Sagan



53


COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary
Pay-for-Performance Philosophy

In keeping with our results-driven culture, the Compensation Committee expects our executives to deliver superior performance in a sustained fashion. As a result, a substantial portion of our executives’ overall compensation is tied to Company performance, with a substantial majority of compensation awarded in the form of equity. The Compensation Committee links compensation to the achievement of challenging short- and long-term strategic, operational and financial goals that will drive EMC to achieve profitable revenue growth and market share gains, while investing in the business to further expand the global market opportunity for our product, services and solutions portfolio. In designing our executive compensation program, the Compensation Committee focuses on promoting our business strategy and aligning the interests of our executives with those of EMC shareholders.
Business Strategy

The evolution of the IT marketplace, driven by the adoption of mobile devices, cloud computing, Big Data and social networking, continues to have a profound impact on enterprises and the way people work and live.  EMC’s strategy is to enable enterprises to modernize their client/server-based infrastructures and applications while helping them to build new infrastructures and applications that take advantage of next generation opportunities in the cloud/mobile era of computing.

EMC is executing this strategy through our Federation business model, which includes three distinct businesses: EMC Information Infrastructure, Pivotal Software and VMware Virtual Infrastructure (the “Federation”), which are strategically aligned to provide benefits for customers and partners. Under this Federation model, each business operates freely and independently to build its own ecosystem. Customers have the ability to choose from a selection of the very best technology solutions, free from vendor lock-in. We believe this model creates a competitive advantage by ensuring tight integration of solutions for customers who prefer an integrated solution, and at the same time by allowing us to provide the best-of-breed offerings on a standalone basis for customers who prefer maximum flexibility in vendor and deployment options.

EMC stands at the forefront of the IT industry with a leading portfolio of products, services and solutions that provide a strong position from which to compete in the client/server-based platform of IT, which will continue to support the majority of enterprise workloads for several years to come; leading-edge technologies and products for the new cloud/mobile platform of IT; and powerful capabilities to help enterprises bridge the two.
2014 Business Results

EMC achieved solid revenue and profit growth in 2014. We believe this speaks to the power of the EMC portfolio, a solid operational and financial model, the dedication of our truly talented workforce and consistent execution of our strategy. We also increased our quarterly dividend and accelerated our buyback program - returning $3.9 billion to our shareholders. At the same time, EMC’s 2014 operational results were negatively impacted by several factors, including currency fluctuations.

54



Compensation Discussion and Analysis (continued)

In 2014, we achieved the following revenue, profit and free cash flow:
  
2014 ($)
% Growth from 2013
Revenue
24.44 billion
5%
Non-GAAP Earnings Per Share (“EPS”)*
1.90
6%
Free Cash Flow*
5.04 billion
(9%)
*
A reconciliation of our GAAP to non-GAAP results can be found in Exhibit B to this Proxy Statement.

Please see “Management’s Discussion and Analysis” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 for a more detailed description of our fiscal year 2014 financial results.
2014 Executive Compensation Program

The Compensation Committee approved an executive compensation program for 2014 that implemented our pay-for-performance philosophy, with the following enhancements:

Introduced a long-term equity incentive plan to replace the annual performance equity award program;
Added a relative TSR metric to the long-term equity incentive plan; and
Simplified the equity program by using fewer types of equity awards.

The primary elements of our executive compensation program are base salary, cash bonuses and equity incentives. In designing the cash bonus and equity incentive plans, the Compensation Committee predominantly used consolidated financial metrics as performance goals to drive the successful execution of the Federation strategy.

Below is a summary of the Named Executive Officers’ 2013 and 2014 compensation as set forth in the Summary Compensation Table:
Name
Year
Salary
($)
Cash Incentive Compensation
($)
Equity
Awards
($)
All Other
Compensation*
($)
Total
($)
Joseph M. Tucci
2014
1,000,000
1,307,021
8,415,112
481,186
11,203,318
2013
1,000,000
1,260,058
10,076,821
309,079
12,645,957
David I. Goulden
2014
850,000
1,075,513
8,415,112
190,632
10,531,257
2013
850,000
1,006,296
6,453,659
122,621
8,432,576
Zane C. Rowe
2014
167,308
174,686
6,000,019
54,350
6,696,362
Howard D. Elias
2014
750,000
746,183
5,259,464
178,839
6,934,486
2013
750,000
700,032
4,444,834
136,194
6,031,061
Jeremy Burton
2014
768,750
717,035
5,259,464
158,236
6,903,485
2013
675,000
590,652
4,117,680
92,886
5,476,218
William F. Scannell
2014
700,000
699,546
5,259,464
172,271
6,831,281
2013
700,000
656,280
4,444,834
108,412
5,909,526

For more information, please see the Summary Compensation Table, and the accompanying compensation tables, beginning on page 77 of this Proxy Statement.
2014 Cash Bonuses

For the cash bonus plans, the Compensation Committee approved challenging revenue, profitability and cash flow goals, as well as qualitative goals to complete strategic and operational priorities, because they believe that solid performance in these areas leads to long-term shareholder value.


55



Compensation Discussion and Analysis (continued)

Based on EMC’s financial performance in 2014, as described in the table above, the Named Executive Officers achieved approximately 100%, 99.5% and 86.8%, respectively, of the non-GAAP EPS, revenue and free cash flow targets established by the Compensation Committee for the 2014 Corporate Incentive Plan. In addition, the Named Executive Officers achieved between 82% and 93% of their respective strategic and operational priorities established by the Compensation Committee for the Executive MBO.

Since our 2014 revenue and free cash flow results fell below the applicable plan targets and the Named Executive Officers failed to achieve all of their respective strategic and operational goals, the Named Executive Officers’ cash bonuses were paid at less than target, in the amounts set forth below:
Name
Corporate Incentive Plan
Executive MBO
Target ($)
Actual ($)
Target ($)
Actual ($)
Joseph M. Tucci
1,080,000
1,011,960
360,000
295,061
David I. Goulden
862,500
808,163
287,500
267,350
Zane C. Rowe
140,625
131,766
46,875
42,920
Howard D. Elias
600,000
562,200
200,000
183,983
Jeremy Burton
576,563
540,239
192,188
176,796
William F. Scannell
562,500
527,063
187,500
172,484
2014 Equity Incentive Awards

In February 2014, the Compensation Committee granted our Named Executive Officers a mix of 60% performance stock unit awards and 40% time-based stock unit awards, as described below. Mr. Rowe was hired in October 2014, and he received a time-based stock unit award as part of his new-hire employment package. The number of equity awards granted to the Named Executive Officers is set forth below:
Name
Performance Stock Unit Awards
(#)
Time-Based Stock Unit Awards
(#)
Joseph M. Tucci
201,006
134,004
David I. Goulden
201,006
134,004
Zane C. Rowe
N/A
206,399
Howard D. Elias
125,629
83,753
Jeremy Burton
125,629
83,753
William F. Scannell
125,629
83,753
To encourage our Named Executive Officers to drive long-term performance, the Compensation Committee granted them these performance stock units with three-year cumulative non-GAAP EPS, revenue and relative TSR goals. The Compensation Committee will measure the level of achievement of the performance goals in 2017. We refer to these three-year performance awards as the “2014 LTIP stock units.”
    
In addition, recognizing that a very large portion of our executives’ compensation is at risk, the Compensation Committee granted our Named Executive Officers these time-based stock units to promote retention. The time‑based stock units vest at the rate of one-third per year on each of the first three anniversaries of the grant date, subject to the executive’s continued employment with EMC.
Equity Vesting Based on Multi-Year Performance

2012 Leadership Development and Performance Award

In September 2012, the Compensation Committee granted a two-year performance-based restricted stock unit award to Mr. Tucci tied to the Company’s achievement of two-year cumulative revenue and relative TSR metrics for fiscal years 2013 and 2014, and Mr. Tucci’s satisfaction of specific qualitative goals related to the development of senior

56



Compensation Discussion and Analysis (continued)

leadership across our business units and succession planning, the development of a long-term business strategy and the successful launch of Pivotal Software. We refer to this two-year performance award as the “2012 Leadership Development and Performance Award.”

Since the 2012 Leadership Development and Performance Award was incremental to Mr. Tucci’s annual compensation, the Compensation Committee set a rigorous revenue target to encourage sustained growth. IT spending growth over the past two years was significantly slower than the Compensation Committee originally anticipated. We achieved 94.8% of the revenue target, which resulted in 18.7% of the 2012 Leadership Development and Performance Award becoming eligible to vest. In addition, our share price did not perform as well as expected relative to the S&P 500 Technology Index over the two-year period, such that Mr. Tucci did not earn any portion of the 2012 Leadership Development and Performance Award based on our TSR results. The Compensation Committee determined that Mr. Tucci achieved all of the specific qualitative goals, which resulted in 20% of the 2012 Leadership Development and Performance Award becoming eligible to vest.

Accordingly, 38.7% of the 2012 Leadership Development and Performance Award vested in February 2015. The remaining 61.3% of the 2012 Leadership Development and Performance Award did not vest and was forfeited.
2011 Long-Term Incentive Plan Awards

In August 2011, the Compensation Committee granted three-year performance-based restricted stock units to select members of EMC’s senior management team, including Messrs. Goulden, Elias, Burton and Scannell. We refer to these grants as the “2011 LTIP stock units.”

The Compensation Committee designed the 2011 LTIP stock units with two potential vesting triggers. First, the Compensation Committee set a three-year cumulative revenue target for fiscal years 2012 through 2014, under which a certain percentage of the 2011 LTIP stock units would become eligible to vest if EMC reached at least a threshold level of cumulative revenue over the three-year period. In addition, even if the threshold level of performance was not achieved, 50% of the 2011 LTIP stock units could become eligible to vest if EMC’s three-year cumulative revenue growth was at least 10% higher than the median ranking of the three-year revenue growth of our compensation peer group.

Since the 2011 LTIP stock unit awards were incremental to the participating executives’ annual compensation, the Compensation Committee set a rigorous cumulative revenue target to encourage sustained growth. IT spending growth over the past three years was significantly slower than the Compensation Committee originally anticipated. Our actual three-year cumulative revenue was below the threshold level of achievement required for any 2011 LTIP stock units to vest. However, EMC’s three-year revenue growth ranked at the 79th percentile of our compensation peer group, and was significantly higher than 10% above the median three-year revenue growth of our compensation peer group.

Accordingly, 50% of the 2011 LTIP stock units for Messrs. Goulden, Elias, Burton and Scannell became eligible to vest in two equal installments in 2015 and 2016, subject to the executive’s continued employment. The remaining 50% of the 2011 LTIP stock units did not vest and were forfeited.



57



Compensation Discussion and Analysis (continued)

Other Compensation Practices

Highlights of our executive compensation program also include:
What We Do
ü Pay-for-performance
ü Require significant stock ownership by executives and
       directors
ü Maintain “double trigger” change in control
       agreements
ü Maintain a clawback policy applicable to all
       employees for cash and equity incentive
       compensation
ü Compensation Committee oversees risks associated
       with compensation policies and practices
ü Compensation Committee retains an independent
       compensation consultant
ü CEO succession planning
What We Do Not Do
û   No hedging or pledging of Company stock
û   No excessive perquisites for executives
û   No pension or SERP benefits for executives
û   No discounted stock options
û   No option repricings without shareholder approval
û   No dividend equivalents paid unless equity awards
     vest
û   No excise tax gross-ups


The Compensation Committee believes that the actions described above clearly demonstrate the Company’s commitment to and consistent execution of an effective pay-for-performance executive compensation program.
Consideration of 2014 Advisory Vote on Executive Compensation

At our 2014 Annual Meeting of Shareholders, our shareholders expressed strong support for our executive compensation program, with over 93% of votes cast voting in favor of the proposal. Following the 2014 Annual Meeting of Shareholders, we dialogued and met with many shareholders to discuss our executive compensation program and we received positive feedback on the enhancements the Compensation Committee made to our 2014 executive compensation program.

When designing our 2015 executive compensation program, the Compensation Committee considered, among other things: the 2014 “say-on-pay” voting results; comments received during our shareholder engagement; recent changes made to the executive compensation program in 2014; evolving compensation practices; the economic environment; our financial and operational performance; and our leadership succession plans. After careful consideration, the Compensation Committee determined to retain the core design of our executive compensation program for 2015.


58



Compensation Discussion and Analysis (continued)

Named Executive Officers

The executive officers who appear in the Summary Compensation Table for 2014 are referred to collectively in this Proxy Statement as the “Named Executive Officers,” and they are:
Name
Title
Joseph M. Tucci
Chairman and Chief Executive Officer
David I. Goulden
Chief Executive Officer, EMC Information Infrastructure
Zane C. Rowe
Executive Vice President and Chief Financial Officer
Howard D. Elias
President and Chief Operating Officer, Global Enterprise Services
Jeremy Burton
President, Products and Marketing
William F. Scannell
President, Global Sales and Customer Operations


Mr. Goulden also served as our Chief Financial Officer until October 2014 when Mr. Rowe was hired as our Chief Financial Officer.
EMC’s Executive Compensation Program

The primary elements of EMC’s executive compensation program are base salary, cash bonuses and equity incentives.

When designing the executive compensation program, the Compensation Committee gives significant weight to cash bonuses and equity incentives, which reflects the Compensation Committee’s belief that a large portion of executive compensation should be performance-based. This compensation is performance-based since payment and/or vesting are tied to the achievement of individual and/or corporate performance goals. In addition, with respect to the equity awards, the value ultimately realized by the recipient fluctuates with the price of our common stock. The Compensation Committee believes that equity incentives are particularly significant because they drive the achievement of EMC’s long-term operational and strategic goals and align the executives’ interests with those of EMC shareholders, while the cash bonuses drive the achievement of shorter-term performance goals. In designing our cash bonus and equity incentive plans, the Compensation Committee predominantly used consolidated financial metrics as performance goals to drive the successful execution of the Federation strategy.

Set forth below is a summary of the relative weights given to each component of the 2014 compensation opportunities for the Named Executive Officers.*
______________________
*
Reflects average compensation; excludes Mr. Rowe’s compensation due to his new-hire employment package and partial year compensation.

59



Compensation Discussion and Analysis (continued)

For purposes of determining the percentages shown above for the annual compensation opportunities of the Named Executive Officers, the base salaries and cash bonus targets are calculated on an annualized basis. In addition, it is assumed that cash bonuses are earned at target levels and restricted stock units have a value equal to the underlying value of the stock on the date the grant was approved. Since incentive compensation has both upside opportunities and downside risk, these percentages may not reflect the actual amounts realized.
Base Salary

We use base salary to compensate our employees, including the Named Executive Officers, for performing their day-to-day responsibilities. In general, the base salary of each of the Named Executive Officers is determined by evaluating the executive officer’s responsibilities, experience and impact on EMC’s results and the salaries paid to executive officers in comparable positions by our compensation peer group. After consideration of the foregoing factors, the Compensation Committee did not make any changes to the base salaries of our Named Executive Officers for 2014, except for Mr. Burton. In recognition of Mr. Burton’s expanded responsibilities associated with his promotion to President, Products and Marketing, in March 2014, the Compensation Committee approved an increase in Mr. Burton’s base salary.

The Named Executive Officers’ 2014 and 2015 annual base salaries are set forth below:
Name
2014
($)
2015
($)
Joseph M. Tucci*
1,000,000
1,000,000
David I. Goulden
850,000
850,000
Zane C. Rowe
750,000**
750,000
Howard D. Elias
750,000
750,000
Jeremy Burton
800,000***
800,000
William F. Scannell
700,000
700,000
*
Mr. Tucci’s base salary has not increased since 2001.
**
Mr. Rowe received a prorated portion of his base salary in 2014.
***
In recognition of Mr. Burton’s promotion as described above, his annual base salary increased from $675,000 to $800,000 in March 2014.
The Compensation Committee determined not to make any changes to the base salaries of the Named Executive Officers for 2015 in connection with our annual compensation review.
Cash Bonus Plans

In 2014, more than 95% of our employees, including the Named Executive Officers, participated in our cash bonus plans under which the payment of bonuses is contingent upon the achievement of pre-determined performance goals. Our cash bonus plans are designed to motivate our employees to achieve specified corporate, business unit, individual, strategic, operational and financial performance goals.

Each year, the Compensation Committee approves each Named Executive Officer’s cash bonus opportunity. In determining the cash bonus opportunity, the Compensation Committee considers a number of factors, including EMC’s performance, the individual’s performance and the performance of the business unit or function for which the individual is responsible, the individual’s contribution to the execution of the Federation strategy, the individual’s experience, similar compensation opportunities that may be payable to similarly situated executives internally and externally, changes in the competitive marketplace and the economy, and the other elements of compensation payable by EMC to the individual. After consideration of the foregoing factors, the Compensation Committee did not make any changes to the annual target cash bonus opportunities of our Named Executive Officers for 2014, except for Mr. Burton. In recognition of Mr. Burton’s expanded responsibilities associated with his promotion to President, Products and Marketing, in March 2014, the Compensation Committee approved an increase in Mr. Burton’s target cash bonus opportunity.

60



Compensation Discussion and Analysis (continued)

The Named Executive Officers’ 2014 and 2015 total annual target cash bonus opportunities are set forth below:
Name
2014
($)
2015
($)
Joseph M. Tucci*
1,440,000
1,440,000
David I. Goulden
1,150,000
1,150,000
Zane C. Rowe
750,000**
750,000
Howard D. Elias
800,000
800,000
Jeremy Burton
800,000***
800,000
William F. Scannell
750,000
750,000
*
Mr. Tucci’s total annual target cash bonus opportunity has not increased since 2001.
**
Mr. Rowe was eligible to earn a prorated portion of his cash bonus opportunity in 2014.
***
In recognition of Mr. Burton’s promotion in March 2014, his target cash bonus opportunity increased from $675,000 to $800,000.     
The Compensation Committee determined not to make any changes to the annual target cash bonus opportunities of the Named Executive Officers for 2015 in connection with our annual compensation review.
2014 Cash Bonus Plans

For 2014, the Compensation Committee approved two cash bonus plans in which the Named Executive Officers were eligible to participate: the Corporate Incentive Plan and the Executive MBO. The Corporate Incentive Plan is intended to incent the achievement of financial metrics for the Company that are aligned with the annual operating plan set by the Board. The Executive MBO is intended to incent the achievement of strategic and operational goals.

The Compensation Committee determined that the vast majority (75%) of the cash bonus opportunity for the Named Executive Officers should be allocated to the Corporate Incentive Plan since they have responsibility for, and a significant impact on, EMC’s overall corporate performance and achievement of long-term objectives, and the remaining portion (25%) of their respective cash bonus opportunity should be allocated to the Executive MBO to focus on the achievement of specific strategic and operational goals.

The Compensation Committee placed a greater percentage allocation of the 2014 annual target cash bonus opportunity on the Executive MBO (25% in 2014) in comparison to prior years (20% in 2013) to emphasize the significance of EMC’s strategic and operational priorities.
2014 Corporate Incentive Plan

The 2014 Corporate Incentive Plan is an annual incentive plan under which EMC executives, including our Named Executive Officers, are eligible to receive cash bonuses contingent upon EMC’s attainment of EPS, revenue and free cash flow targets, with 50% of the opportunity based on EPS, 30% based on revenue and 20% based on free cash flow. The Compensation Committee selected these financial metrics because in its judgment they represent the primary metrics on which the Named Executive Officers should focus to drive EMC’s strategic plan and shareholder value. EPS was given the greatest weighting under the 2014 Corporate Incentive Plan to emphasize profitable growth and because the Compensation Committee believes that increases in EPS will lead to greater long-term shareholder value. EPS and free cash flow are calculated on a non-GAAP basis. EMC’s management uses these non-GAAP financial measures in their financial and operating decision-making because management believes they reflect EMC’s ongoing business in a manner that allows meaningful period-to-period comparisons.

Plan participants were provided with the opportunity to earn up to 40% of their annual target bonus on the achievement of both EPS and revenue targets set by the Compensation Committee for the first half of 2014. The opportunity to receive a first half payment was provided to incent strong revenue growth and profitability during the first half of the year. The plan design provided no payment for the free cash flow component for the first half of 2014

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Compensation Discussion and Analysis (continued)

because the Compensation Committee determined that it would not be appropriate to assess whether a full year free cash flow target would be achieved after only six months given the large number of factors that could impact free cash flow in the second half of the year.

The 2014 Corporate Incentive Plan funds at 100% of target upon the achievement of the performance target for each of the three metrics. Although, generally, participants were not entitled to a bonus unless the performance threshold for each metric was achieved, the Compensation Committee had discretion under the plan to award up to 50% of the annual target opportunity for performance below that threshold. In addition, the plan provided that the Compensation Committee could exercise negative discretion to reduce payments. The maximum bonus opportunity under the plan was equal to 200% of a participant’s target bonus opportunity.

The elements of the 2014 Corporate Incentive Plan are set forth below:
Performance Goal
Threshold
(50%
Payout)
($)
Target
(100% Payout)
($)
Maximum
(200%
Payout)
($)
Component Weighting
Achievement/
Plan Payout
($)
Non-GAAP EPS*
1.52
1.90
1.99
50%
1.90/100%
Revenue (billions)
19.660
24.575
25.497
30%
24.440/98.7%
Non-GAAP free cash flow (billions)*
4.640
5.800
6.059
20%
5.035/70.4%
*
For purposes of calculating achievement of the EPS target, amounts relating to stock-based compensation expense, intangible asset amortization, restructuring charges, acquisition and other related charges, a gain on previously held interests in strategic investments and joint venture, an impairment of strategic investment, and VMware litigation and other contingencies were excluded. For purposes of calculating achievement of the free cash flow target, free cash flow was defined as net cash provided by operating activities less additions to property, plant and equipment and capitalized software development costs. A reconciliation of our GAAP to non-GAAP results can be found in Exhibit B to this Proxy Statement.

EMC’s 2014 operational results were negatively impacted by several factors, including currency fluctuations. Consequently, we did not achieve 100% of the revenue or free cash flow targets under the 2014 Corporate Incentive Plan, and each participant’s bonus was paid at only 93.7% of target. The annual target bonus opportunities and actual payouts to the Named Executive Officers under the 2014 Corporate Incentive Plan are set forth below:
Name
Corporate Incentive Plan
Target
($)
Actual
($)
Joseph M. Tucci
1,080,000
1,011,960
David I. Goulden
862,500
808,163
Zane C. Rowe
140,625*
131,766
Howard D. Elias
600,000
562,200
Jeremy Burton
576,563**
540,239
William F. Scannell
562,500
527,063
*
Reflects prorated target based on Mr. Rowe’s hire date.
**
Reflects adjusted annualized target due to the increase in Mr. Burton’s Corporate Incentive Plan opportunity in March 2014.
2014 Executive MBO

In 2014, members of our executive leadership team were eligible to receive semi-annual cash bonuses contingent upon achievement of a number of shared and individual semi-annual performance goals under the Executive MBO. The primary purpose of the Executive MBO is to focus our executive leadership team on the completion of strategic and operational priorities, thereby leading to greater long-term shareholder value.

For each half of 2014, the Compensation Committee assigned seven or eight shared goals to the executive leadership team, including the Named Executive Officers, with 90% of the semi-annual payments tied to the achievement of these

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Compensation Discussion and Analysis (continued)

shared goals. In addition, the participating executives were assigned individual goals, with 10% of the semi-annual payments tied to achievement of the individual goals. The Compensation Committee assigned individual goals to Messrs. Tucci and Goulden for each half of 2014. Mr. Tucci assigned individual goals to each of the other Named Executive Officers based on their respective job responsibilities, except for Mr. Rowe. Each of the shared goals and individual goals were specific and measurable. At the close of each half of 2014, the Compensation Committee or Mr. Tucci, as applicable, determined whether the applicable semi-annual goals had been achieved. Since Mr. Rowe was hired in October 2014, 100% of his prorated semi-annual payment was tied to the achievement of the second-half shared goals.

A general description of the shared and individual goals assigned to the Named Executive Officers under the Executive MBO in 2014 is set forth below:

Shared Goals
Executive Officers
Description
All Named Executive Officers
l Maximize cross-Federation strategic opportunities
l Expand 3rd platform storage and infrastructure business strategy
l Implement “storage-as-a-service” business initiatives
l Strengthen converged infrastructure strategy
l Develop a more solutions-focused value-based sales approach
l Increase employee engagement and related initiatives
 
In addition to the shared goals described above, the Compensation Committee assigned the Named Executive Officers certain financial goals under the Executive MBO that were aligned to EMC’s 2014 operating plan. The Compensation Committee assigned Mr. Tucci second-half financial goals related to EMC’s consolidated revenue and non-GAAP EPS results, as the Compensation Committee determined that Mr. Tucci is most responsible for the overall Federation strategy. All the other Named Executive Officers had first- and second-half financial goals based on revenue and operating income results for the EMC Information Infrastructure business, as the Compensation Committee determined that those executives should have an additional incentive to focus on the EMC Information Infrastructure business.
  
EMC achieved the following results against those targets:
 
Joseph M. Tucci
All Other NEOs
EMC Consolidated
EMC Information Infrastructure
Revenue
(billions)
Non-GAAP
EPS*
Revenue
(billions)
Operating Income**
(billions)
Target
($)
Actual
($)
Target
($)
Actual
($)
Target
($)
Actual
($)
Target
($)
Actual
($)
First-half 2014
N/A
N/A
N/A
N/A
8.414
8.454
1.692
1.714
Second-half 2014
13.240
13.081
1.14
1.13
9.871
9.762
2.588
2.510
*
A reconciliation of our GAAP to non-GAAP results can be found in Exhibit B to this Proxy Statement.
**
For purposes of calculating achievement of the EMC Information Infrastructure operating income target, amounts relating to corporate reconciling items, VMware operating income and Pivotal operating expense were excluded. A reconciliation of EMC consolidated operating income to EMC Information Infrastructure operating income can be found in Exhibit B to this Proxy Statement.

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Compensation Discussion and Analysis (continued)

Individual Goals*
Executive Officer
Description
Joseph M. Tucci
l Lead Federation strategy
l Focus on succession planning initiatives
David I. Goulden
l Execute talent management initiatives
l Develop and communicate long-term strategic priorities
Howard D. Elias
l Lead implementation of key organizational changes at EMC
Information Infrastructure
l Develop and communicate long-term strategic priorities