DEF 14A 1 intu2016-proxy.htm DEF 14A Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
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Soliciting Material under § 240.14a-12
INTUIT INC.
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f57292def5729200a01a02.gif
INTUIT INC.
2700 Coast Avenue
Mountain View, CA 94043
NOTICE OF 2017 ANNUAL MEETING OF STOCKHOLDERS
Dear Stockholder:
You are cordially invited to attend our 2017 Annual Meeting of Stockholders, which will be held at 8:00 a.m. Pacific Standard Time on January 19, 2017 at our offices at 2750 Coast Avenue, Building 6, Mountain View, California 94043. We are holding the meeting for the following purposes:
1. To elect the nine directors nominated by the Board of Directors and named in the proxy statement to hold office until the next annual meeting of stockholders or until their respective successors have been elected and qualified;
2. To ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending July 31, 2017;
3. To approve the Amended and Restated 2005 Equity Incentive Plan to (a) increase the share reserve by an additional 23,110,386 shares; (b) reapprove the material terms of performance-based compensation for purposes of Section 162(m); and (c) amend certain terms of the 2005 Equity Incentive Plan.
4. To approve, on an advisory basis, the Company’s executive compensation.
Stockholders will also consider any other matters that may properly be brought before the annual meeting and any postponement(s) or adjournment(s) thereof.
Only stockholders who owned our stock at the close of business on November 21, 2016 may vote at the annual meeting, or at any adjournment or postponement of the annual meeting.
Your vote is important. Whether or not you plan to attend the annual meeting, please cast your vote, as instructed in the Notice of Internet Availability of Proxy Materials, over the Internet or by telephone, as promptly as possible. You may also request a paper proxy card to submit your vote by mail, if you prefer. We encourage you to vote via the Internet. We believe it is convenient for our stockholders, while significantly lowering the cost of our annual meeting and conserving natural resources.
Important Notice Regarding the Availability of Proxy Materials for Annual Meeting of Stockholders to Be Held on January 19, 2017. The proxy statement is available electronically at http://investors.intuit.com/financial-information/proxy-statements/default.aspx and Intuit’s Annual Report on Form 10-K for fiscal year ended July 31, 2016 is available electronically at http://investors.intuit.com/financial-information/annual-reports/default.aspx.
By order of the Board of Directors,
signaturea02.gif
Laura A. Fennell
Executive Vice President, General Counsel and Corporate
Secretary
Mountain View, California
November 23, 2016



INTUIT INC.
PROXY STATEMENT 2017 ANNUAL MEETING OF STOCKHOLDERS
 
Page









INTUIT INC.
2700 Coast Avenue
Mountain View, CA 94043

PROXY STATEMENT FOR THE
2017 ANNUAL MEETING OF STOCKHOLDERS


2017 PROXY SUMMARY

Intuit Inc.’s (“Intuit” or the “Company”) Board of Directors (the “Board”) is asking for your proxy for use at the Intuit Inc. 2017 Annual Meeting of Stockholders (the “Meeting”) and at any adjournment or postponement of the Meeting for the purposes set forth in the accompanying Notice of 2017 Annual Meeting of Stockholders. This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.

We have first released this proxy statement to Intuit stockholders beginning on November 23, 2016.

Annual Meeting of Stockholders
Time and Date
 
Thursday, January 19, 2017 at 8:00 a.m. Pacific Standard Time
Place
 
Intuit’s offices at 2750 Coast Avenue, Building 6, Mountain View, California 94043
Record Date
 
November 21, 2016
Voting
 
Stockholders of Intuit as of the record date are entitled to vote. Each share of Intuit common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on.

Webcast of Meeting

If you are not able to attend the Meeting in person, you may join a live webcast of the Meeting on the Internet by visiting http://investors.intuit.com on Thursday, January 19, 2017 at 8:00 a.m. Pacific Standard Time.

Meeting Information

The following chart describes the proposals to be considered at the meeting, the vote required to elect directors and to approve each other proposal, the manner in which votes will be counted and the Board’s voting recommendation:

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Proposal
 
Voting Options
 
Vote Required to Adopt the Proposal
 
Effect of Abstentions
 
Effect of Broker Non-Votes”
 
Board’s Voting Recommendation
1. Election of directors
 
For, against or abstain on each nominee
 
A nominee for director will be elected if the votes cast for such nominee exceed the votes cast against such nominee
 
No effect
 
No effect
 
FOR the election of each of the director nominees
2. Ratification of selection of Ernst & Young LLP
 
For, against or abstain
 
The affirmative vote of a majority of the shares of common stock represented at the annual meeting and voted for or against the proposal
 
No effect
 
Not applicable (1)
 
FOR
3. Approval of the Amended and Restated 2005 Equity Incentive Plan
 
For, against or abstain
 
The affirmative vote of a majority of the shares of common stock represented at the annual meeting and voted for or against the proposal
 
No effect
 
No effect
 
FOR
4. Advisory vote to approve Intuit’s executive compensation
 
For, against or abstain
 
The affirmative vote of a majority of the shares of common stock represented at the annual meeting and voted for or against the proposal
 
No effect
 
No effect
 
FOR
(1) This is considered to be a routine matter and, therefore, if you hold your shares in street name and do not provide voting instructions to the broker, bank or other nominee that holds your shares, the nominee has discretionary authority to vote on this Proposal but not any other Proposals since they are considered to be “non-routine” matters.

We will also consider any other matters that may properly be brought before the Meeting and any postponement(s) or adjournment(s) thereof. As of the date of this proxy statement, we have not received notice of other matters that may be properly presented at the Meeting.

How to Vote

Please act as soon as possible to vote your shares, even if you plan to attend the Meeting. You may vote via the Internet, by telephone or, if you have received a printed version of these proxy materials, by mail. If your shares are held on your behalf by a broker, bank or other nominee, you must instruct your nominee on how to vote the shares held in your account. If you do not provide your nominee with voting instructions, your nominee may only vote on Proposal 2 (ratifying the selection of our independent registered public accountant).

Board Nominees and Committee Memberships After Meeting

The following table provides summary information about each director nominee.

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Committee Memberships
 
Name
Director Since (1)
Occupation
Independent
AC
ARC
CODC
NGC
Other Public Company Boards
Eve Burton
2016
Senior Vice President and General Counsel, The Hearst Corporation
X
X
X
 
 
 
Scott D. Cook
1984
Founder and Chairman of the Executive Committee, Intuit Inc.
 
 
 
 
 
The Procter & Gamble Company
Richard L. Dalzell
2015
Former Senior Vice President and Chief Information Officer, Amazon.com, Inc.
X
C
X
 
 
Twilio, Inc.
Diane B. Greene
2006
Senior Vice President, Google, Inc., Former President and Chief Executive Officer, VMware, Inc.
X
 
 
X
C
Alphabet Inc.
Suzanne Nora Johnson
2007
Former Vice-Chairman, The Goldman Sachs Group
X
 
 
C
X
American International Group, Inc.; Pfizer Inc.; VISA Inc.
Dennis D. Powell
2004
Former Chief Financial Officer, Cisco Systems, Inc.
X
X
C
 
 
Applied Materials, Inc.
Brad D. Smith
2008
Chairman, President and Chief Executive Officer, Intuit Inc.
 
 
 
 
 
Nordstrom, Inc.
Raul Vazquez
2016
Chief Executive Officer and Director, Oportun
X
X
X
 
 
 
Jeff Weiner
2012
Chief Executive Officer, LinkedIn Corporation (2)
X
 
 
X
X
LinkedIn Corporation (2)

(1) Four of our nine directors have served on our Board for fewer than five years. These four directors constitute more than fifty percent of our seven independent directors.
(2) LinkedIn Corporation has entered into a Merger Agreement with Microsoft Corporation, pursuant to which LinkedIn will become a wholly owned subsidiary of Microsoft. Mr. Weiner is expected to continue to serve as Chief Executive Officer of LinkedIn following consummation of the transaction, which remains subject to certain conditions.



AC
 
Acquisition Committee
ARC
 
Audit and Risk Committee
CODC
 
Compensation and Organizational Development Committee
NGC
 
Nominating and Governance Committee
C
 
Chair
Attendance
 
During fiscal 2016, all of our incumbent directors attended at least 75% of the aggregate number of meetings of the Board and committees on which he or she sits.

Fiscal 2016 Executive Compensation Highlights
Commitment to Pay for Performance
Our executive compensation programs are designed to reward both short- and long-term growth, as well as total stockholder return (“TSR”). Our short-term performance-based compensation consists of annual cash bonuses, which are based upon achievement of annual corporate operating goals, including revenue, non-GAAP operating income and deferred revenue balance at fiscal year end, as well as on an assessment of individual contribution and performance. Our fiscal 2016 long-term

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compensation consisted of 50% performance-based restricted stock units (“RSUs”) based on relative total stockholder return (“Relative TSR RSUs”), 25% service-based RSUs and 25% non-qualified stock options.
Fiscal 2016 Business Highlights
Intuit achieved revenue of $4.7 billion, GAAP operating income of $1.2 billion, non-GAAP operating income of $1.6 billion, GAAP diluted earnings per share (EPS) of $3.69 and non-GAAP diluted EPS of $3.78 (see table on page A-3 of this proxy statement for a reconciliation of non-GAAP financial measures) and a one-year TSR of 6.19% for fiscal 2016.
Our revenue, GAAP and non-GAAP operating income and non-GAAP earnings per share for fiscal 2016 exceeded our guidance.
We believe that these non-GAAP financial measures provide meaningful supplemental information regarding Intuit’s operating results primarily because they exclude amounts that we do not consider part of ongoing operating results when planning and forecasting and when assessing the performance of the organization, our individual operating segments or our senior management.
Key highlights from fiscal 2016 include the following:
Fiscal 2016 revenue of $4.7 billion, an increase of 12% over fiscal 2015; GAAP operating income of $1.2 billion, an increase of 68% over the prior year, and non-GAAP operating income of $1.6 billion, up 36%; GAAP diluted earnings per share of $3.69, up from $1.28 in 2015, and non-GAAP diluted EPS of $3.78, up 46%, in each case, exceeding our guidance for the year; note that fiscal 2016 GAAP earnings per share includes $0.65 net income per share from discontinued operations and fiscal 2015 GAAP earnings per share includes $0.17 net loss per share from discontinued operations;
A year-over-year increase of 15% in TurboTax Online units in the U.S., with total TurboTax units growing 12% (excluding the Free File Alliance, which is our free tax offering for eligible taxpayers);
The Consumer Tax business had revenue growth of 10% for fiscal 2016;
Two dozen product innovations in TurboTax, helping to drive share growth in the do-it-yourself software category for the third year in a row;
An increase of 41% in total QuickBooks Online subscribers, reaching 1.513 million subscribers at the end of the 2016 fiscal year, including 45% growth in QuickBooks Online subscribers outside the U.S. to 287,000 and growth in QuickBooks Self-Employed subscribers from 25,000 to 85,000;
Continued momentum in the Small Business Online ecosystem with revenue growth of 25% for the year;
Online payroll customer growth of 17% and online active payments customers growth of 6%;
Continued discipline in the Company’s financial strategy, focusing on cash management and maintaining a strong balance sheet, including paying dividends of $0.30 per share each quarter, and the repurchase of $2.3 billion of shares in fiscal 2016, reducing our weighted average share count by 7%; and
Employee engagement and customer satisfaction scores that continued to reflect best-in-class levels, with Intuit continuing its run of 15 consecutive appearances in Fortune Magazine’s “Top 100 Places to Work” list and placing at #4 on Fortune Magazine’s “Most Admired Software Company” list.
Stockholder Value Delivered
Intuit’s TSR has performed well in recent years. Measured at the end of fiscal 2016, we delivered one-year TSR of 6.19%, three-year annualized TSR of 21.52% and five-year annualized TSR of 20.22%, with our stock price achieving an all-time high as the fiscal year came to a close. The graph below compares the cumulative TSR on Intuit common stock for the last five full fiscal years with the cumulative total returns on the S&P 500 Index and the Morgan Stanley Technology Index for the same period. It assumes that $100 was invested in Intuit common stock and in each of the other indices on July 31, 2011 and that all dividends were reinvested. Over this five-year period, Intuit’s TSR exceeded both the broad market (as evidenced by a comparison against the S&P 500 Index) and the overall technology sector (as evidenced by a comparison against the Morgan Stanley Technology Index). The comparisons in the graph below are based on historical data – with Intuit common stock prices based on the closing price on the dates indicated – and are not intended to forecast the possible future performance of Intuit’s common stock.

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intu2016.jpg
 
July 31, 2011
 
July 31, 2012
 
July 31, 2013
 
July 31, 2014
 
July 31, 2015
 
July 31, 2016
Intuit Inc.
$
100.00

 
$
125.62

 
$
139.91

 
$
181.28

 
$
236.44

 
$
251.09

S&P 500
$
100.00

 
$
109.13

 
$
136.41

 
$
159.52

 
$
177.40

 
$
187.36

Morgan Stanley Technology Index
$
100.00

 
$
111.45

 
$
118.36

 
$
151.58

 
$
169.91

 
$
190.19



Stockholder Engagement Process

Communication with our stockholders, and understanding their perspectives, is very important to us. During fiscal 2016 management, and on occasion, our Lead Independent Director, held discussions with many of our largest stockholders during scheduled events including our annual meeting and investor day, as well as in private meetings throughout the year. We solicited their feedback on various topics, including board succession planning, structure and diversity, our board evaluation process, executive compensation, cybersecurity, corporate governance, enterprise risk management and sustainability. We have considered such feedback in our adoption of proxy access and enhancements to our proxy disclosure. Both management and our Board of Directors will continue to engage with our stockholders on a regular basis in order to understand their perspectives and incorporate their feedback.






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Compensation Practices
Intuit employs a number of practices that reflect our pay-for-performance compensation philosophy, including the following:
Compensation Practices
ü   A significant portion of our fiscal 2016 senior executive officer compensation is in the form of incentives tied to achievement of particular performance measures;
ü   We have “clawback” provisions for operating performance-based equity awards and beginning in the 2016 fiscal year implemented “clawback” provisions for cash bonus payments under our Senior Executive Incentive Plan;
ü   We have stock ownership guidelines for executive officers at the senior vice president level and above and non-employee directors, with the CEO guideline set at six times salary, the senior vice president level and above guideline set at one and a half times salary, and the non-employee director guideline set at five times annual cash retainer;
ü   The CEO’s service-based RSUs and Relative TSR RSUs granted in fiscal 2015 and 2016 include a mandatory one-year holding period, requiring the CEO to hold the underlying shares for at least one year after the awards vest;
û We prohibit directors and executive officers from pledging Intuit stock or engaging in hedging transactions involving Intuit stock;
û   We do not provide supplemental company-paid retirement benefits designed for executive officers;
û   We do not provide any excise tax “gross-up” payments; and
û   We do not provide perquisites or other executive benefits based solely on rank.





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CORPORATE GOVERNANCE
Intuit is committed to excellence in corporate governance and maintains policies and practices that promote good corporate governance, including the following:

Corporate Governance Practices
ü   The Board has adopted majority voting in uncontested elections of directors;
ü   A majority of the board members are independent of Intuit and its management;
ü   The independent members of the Board meet regularly without the presence of management;
ü   All members of the Audit and Risk Committee, Nominating and Governance Committee and Compensation and Organizational Development Committee of the Board are independent;
ü   The charters of the committees of the Board clearly establish the committees’ respective roles and responsibilities;
ü   Our bylaws provide our stockholders with a proxy access right;
ü   The Board and its committees receive periodic updates on regulatory and other developments relevant to the Board from management and outside experts;
ü   Intuit’s internal audit control function maintains critical oversight over the key areas of its business and financial processes and controls, and reports directly to Intuit’s Audit and Risk Committee;
ü   Intuit’s investor relations team, management team and our Lead Independent Director regularly communicate with our stockholders and report to the Board on the stockholders’ perspectives;
ü   Intuit has adopted a Code of Conduct & Ethics for employees that is monitored by Intuit’s ethics office and also has a Code of Ethics that applies to all Board members; and
ü   Intuit’s ethics office has a hotline available to all employees, and Intuit’s Audit and Risk Committee has procedures in place to receive and process complaints, including on a confidential and anonymous basis, regarding accounting, internal accounting controls, auditing and federal securities law matters, or violations of the Code of Conduct & Ethics and for employees to make confidential, anonymous complaints regarding accounting, auditing and federal securities law matters or violations of the Intuit’s Code of Conduct & Ethics.

Our Board has adopted Corporate Governance Principles that are designed to assist the Board in observing practices and procedures that serve the best interests of Intuit and our stockholders. The Nominating and Governance Committee is responsible for overseeing these Corporate Governance Principles, reviewing them at least annually and making recommendations to the Board regarding any changes. These Corporate Governance Principles address, among other things, our policy on succession planning and senior leadership development, Board performance evaluations, committee structure and stock ownership requirements.
We maintain a corporate governance page on our company website that contains key information about corporate governance matters. This information includes copies of our Corporate Governance Principles, Political Accountability Policy, Code of Conduct & Ethics for all employees, including our Company’s senior executive and financial officers, our Operating Values, the charter for each Board committee and the Code of Ethics for our Board. The link to this corporate governance page can be found at http://investors.intuit.com/corporate-governance/conduct-and-guidelines/default.aspx.
Board Responsibilities, Leadership Structure and Executive Sessions
The Board oversees management’s performance on behalf of Intuit’s stockholders. The Board’s primary responsibilities are to (1) select, oversee and determine compensation for the Chief Executive Officer who, with senior management, runs Intuit on a day-to-day basis, (2) monitor management’s performance to assess whether Intuit is operating in an effective, efficient and ethical manner in order to create value for Intuit’s stockholders, and (3) periodically review Intuit’s long-range strategic plan, business initiatives, capital projects and budget matters.
The Board appoints a Chairman, who may be an officer of Intuit if the Board determines that it is in the best interests of Intuit and its stockholders. The roles of Chairman of the Board and Chief Executive Officer may be held by the same person or different people. If the Chairman is also the Chief Executive Officer, then the Board has determined that it will appoint a Lead Independent Director.
Currently, Mr. Smith holds the roles of both Chairman of the Board and Chief Executive Officer. The Board believes that the combination of the roles of Chairman of the Board and Chief Executive Officer is appropriate at this time because of Mr. Smith’s deep understanding of the Company’s business and culture as well as Mr. Smith’s instrumental contributions in developing and leading the Company’s strategic priorities. Mr. Smith’s leadership as the Chairman and CEO helps to effectively drive the Company’s strategy, and to facilitate critical flow of information between the Board of Directors and

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management. This role, combined with the independent members of the Board of Directors, led by a Lead Independent Director acting in accordance with the Company’s robust corporate governance practices and policies, provides effective oversight.
Because Mr. Smith serves as both the Chairman and the Chief Executive Officer, the Company and the Board recognize the importance of providing additional, independent oversight of the Board. The independent directors of the Board designated Ms. Nora Johnson to serve as the Company’s Lead Independent Director for a period of at least one year. Her responsibilities and authority include:
Authority to call executive sessions of the independent directors;
Presiding at meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors, which occur at least quarterly;
Conferring with the Chairman on agenda topics for Board meetings, and approving the agenda and schedule for Board meetings to ensure that there is sufficient time for discussion of all agenda items;
Approving information sent to the Board;
Serving as liaison between the Chairman and the independent directors; and
Being available for consultations and communications with major stockholders upon request.
The Board and its committees meet throughout the year on a set schedule, and also hold special meetings and act by written consent from time to time as appropriate. The Board held five meetings during fiscal 2016. The Board has delegated certain responsibilities and authority to the committees described below. Committees report regularly on their activities and actions to the full Board.
Board Evaluation Process
The Board has an annual evaluation process that is led by the Chairman of the Board and our outside counsel and coordinated and overseen by our Nominating and Governance Committee. Each year, Board members complete an assessment of Board performance, including an evaluation of the issues addressed by the Board, Board culture and structure, processes and information received by the Board. Each Board member assesses the performance of the Committees, including both performance of the Committee and an assessment of how each Committee keeps the full Board informed. In addition, each Board member assesses his or her own performance as well as the performance of his or her fellow Board members. Board members then meet individually with the Chairman of the Board and outside counsel to discuss their assessments and to provide further feedback to share with the other Board members. The Chairman then shares that feedback with the Nominating and Governance Committee and the assessment is discussed by the full Board. The feedback received by the Board is used to identify the strengths and opportunities of each Board member and provide insight into the areas in which each Board member can be most valuable to the Company, as well as to identify skills or expertise that may be used as criteria when the Board considers new Board candidates. In addition, the committees use feedback to improve their agenda topics and the information presented to the committees in order to ensure they continue to address the issues most critical to them in an effective manner. The Nominating and Governance Committee reviews each director’s performance annually when considering whether to re-nominate the director for re-election to the Board.
Board Oversight of Risk
Intuit’s management is responsible for balancing risk and opportunity in support of Intuit’s objectives. Management exercises this responsibility day to day through ongoing identification of risks related to significant business activities, implementation of risk mitigation activities and alignment of risk management to the Company’s strategy. Intuit’s Chief Risk Officer, who reports through to our General Counsel, facilitates the Enterprise Risk Management, or “ERM,” program as part of our strategic planning process. The ERM program helps identify the top risks for each business unit and for Intuit as a whole.
The Board oversees risk management for the Company both directly and through its committees, as follows:
The Audit and Risk Committee has primary responsibility for overseeing our ERM program. The Chief Risk Officer reports on a quarterly basis to the Audit and Risk Committee on Intuit’s top risk areas and the progress of the ERM program. The Audit and Risk Committee also has oversight responsibilities with respect to particular risks such as financial management, fraud and cybersecurity.
The Board’s other committees – Compensation and Organizational Development, Nominating and Governance, and Acquisition – oversee risks associated with their respective areas of responsibility. The Compensation and Organizational Development Committee considers the risks associated with our compensation policies and practices

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for executives and employees generally. The Nominating and Governance Committee considers risks associated with corporate governance and overall board effectiveness, including recruiting appropriate Board members. The Acquisition Committee considers risks associated with Intuit’s merger and acquisition activities and the strategy and business models of acquisition candidates.
The full Board receives an annual update from the Chief Risk Officer regarding the top enterprise-wide risks and the mitigation plans associated with each risk. In addition, the Board provides oversight of specific business strategic risks including those relating to Intuit’s business models and inorganic growth strategy.
At quarterly Board meetings, the CEO and heads of our principal business units provide detailed reports to the Board, which include discussions of the risks involved in their respective areas of responsibility. In addition, members of each committee provide a report to the full Board covering the committee’s risk oversight and other activities. The senior management team also informs the Board routinely of developments that could affect our risk profile or other aspects of our business.
Compensation Risk Assessment
The Company conducted a review of its key compensation programs, policies and practices in conjunction with Frederic W. Cook & Co., Inc. (“FW Cook”), the Compensation and Organizational Development Committee’s independent compensation consultant, which prepared a report on the Company’s incentive programs.
This analysis was reviewed with the Compensation and Organizational Development Committee at its October 19, 2016 meeting. The review and analysis did not identify any compensation programs, policies or practices that create incentives to take risks that are reasonably likely to have a material adverse effect on the Company.
The analysis noted the following factors:
Overall compensation levels are in a competitive market range.
Mix of short-term and long-term incentives, with different performance periods and a broad mix of performance measures.
The compensation programs provide an effective balance in (1) cash and equity mix, (2) annual incentives that are based in part on company-wide performance metrics that align with the Company’s business plans and strategic objectives and in part on a qualitative evaluation of business unit and individual performance, and (3) long-term incentives generally provided through a combination of stock options (generally vesting over three years with terms of seven years), service-based RSUs (generally vesting over three years), and performance-based RSUs (earned after three years based on one-, two- and three-year relative TSR).
Stock ownership guidelines for executive officers at the senior vice president level and above as well as for non-employee directors.
The one-year holding requirement added to the CEO’s Relative TSR RSUs and service-based RSUs beginning with the fiscal 2015 grant, which make up the majority of his grant value.
Severance that is limited in scope and at the lower end of the competitive range for a company of Intuit’s size and scope.
The insider trading policy, which prohibits officers from pledging shares, trading put or call options, and engaging in short sales or hedging transactions involving the Company’s securities.
“Clawback” provisions for operating performance-based equity awards and for cash bonus payments under the Company’s Senior Executive Incentive Plan (“SEIP”).
A Compensation and Organizational Development Committee process that allows for the sharing of robust information and internal discussion prior to making key compensation decisions.
Director Independence
To be considered independent under NASDAQ rules, a director may not be employed by Intuit or engage in certain types of business dealings with Intuit. In assessing director independence under NASDAQ rules, the Nominating and Governance Committee and the full Board review relevant transactions, relationships and arrangements that may affect the independence of our Board members. In addition, as required by NASDAQ rules, the Board makes a determination as to each independent director that no relationship exists which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board reviewed and discussed

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information provided by the directors and by Intuit with regard to each director’s business and personal activities as they relate to Intuit and Intuit’s management.
In determining the independence of our directors, our Board of Directors considered transactions involving payments made by us to companies in the ordinary course of business where Ms. Greene and Mr. Weiner serve as executives. Consistent with NASDAQ independence standards, Intuit did not make payments to, or receive payments from, any of these companies for property or services in the current or any of the last three fiscal years that exceed 5% of Intuit’s or any of the other parties’ consolidated gross revenues. In addition, in considering Mr. Weiner's independence, the Board considered a transaction involving a contribution made individually by Mr. Smith to DonorsChoose.org, a charitable institution where Mr. Weiner serves as a director. Upon review of these relationships and the other information provided by our directors and director nominees, the Board determined that none of these relationships would interfere with the exercise of independent judgment by these directors in carrying out their responsibilities as directors and that the following current directors are independent: Ms. Burton, Mr. Dalzell, Ms. Greene, Ms. Nora Johnson, Mr. Powell, Mr. Vazquez and Mr. Weiner. In addition, the Board previously determined that Edward Kangas, who did not stand for reelection to the Board in January 2016, was an independent director.
Attendance at Board, Committee and Annual Stockholders Meetings
The Board expects that each director will prepare for, attend and participate in all Board and applicable committee meetings and that each Board member will see that other commitments do not materially interfere with his or her service on the Board. Directors generally may not serve on the boards of more than six public companies, including Intuit’s Board. Any director, who has a principal job change, including retirement, must offer to submit a letter of resignation to the Chairman of the Board. The Board, in consultation with the Nominating and Governance Committee, will review each offered resignation and determine whether or not to accept such resignation after consideration of the continued appropriateness of Board membership under the new circumstances.
During fiscal 2016, all current directors attended at least 75% of the aggregate number of meetings of the Board and the committees on which he or she served. Seven of the eight directors nominated and elected at the 2016 Annual Meeting of Stockholders held in January 2016 attended the 2016 Annual Meeting of Stockholders. Neither Mr. Campbell nor Mr. Kangas, whose terms ended on the date of the 2016 Annual Meeting of Stockholders, were in attendance. Our Corporate Governance Principles encourage all directors to attend our Annual Meeting of Stockholders.

Board Committees and Charters
The Board currently has a standing Acquisition Committee, Audit and Risk Committee, Compensation and Organizational Development Committee, and Nominating and Governance Committee. Each committee has a charter which it reviews annually and makes recommendations to our Board for its revision to reflect evolving best practices. Copies of each committee charter can be found on our website at http://investors.intuit.com/corporate-governance/conduct-and-guidelines/default.aspx. The members of each committee are independent and appointed by the Board based on recommendations of the Nominating and Governance Committee and have the opportunity to meet in closed session, without management present, during each committee meeting. Current committee members are identified in the following table.

Director
 
Acquisition Committee
 
Audit and Risk Committee
 
Compensation and Organizational Development Committee
 
Nominating and Governance Committee
Eve Burton
 
X
 
X
 
 
 
 
Scott D. Cook
 
 
 
 
 
 
 
 
Richard L. Dalzell
 
Chair
 
X
 
 
 
 
Diane B. Greene
 
 
 
 
 
X
 
Chair
Suzanne Nora Johnson
 
 
 
 
 
Chair
 
X
Dennis D. Powell
 
X
 
Chair
 
 
 
 
Brad D. Smith
 
 
 
 
 
 
 
 
Raul Vazquez
 
X
 
X
 
 
 
 
Jeff Weiner
 
 
 
 
 
X
 
X
Number of meetings in Fiscal 2016
 
6
 
12
 
5
 
4


10


Acquisition Committee
The Acquisition Committee reviews and approves acquisition, divestiture and investment transactions proposed by Intuit’s management in which the total consideration to be paid or received by Intuit is within certain limits that may be established by the Board from time to time.
Audit and Risk Committee
The Audit and Risk Committee represents and assists the Board in its oversight of Intuit’s financial reporting, internal controls and audit functions, and is directly responsible for the selection, retention, compensation and oversight of the work of Intuit’s independent auditor. It also oversees cybersecurity and other risks relevant to our information technology environment.
Our Board has determined that each member of the Audit and Risk Committee is independent, as defined under applicable NASDAQ listing standards and SEC rules related to audit committee members, and is financially literate, as required by NASDAQ listing standards. Mr. Powell has been determined by the Board to meet the qualifications of an “audit committee financial expert,” as defined by SEC rules, and to meet the qualifications of “financial sophistication” in accordance with NASDAQ listing standards.
The Audit and Risk Committee held closed sessions with our independent auditors, Ernst & Young LLP, in all of its regularly scheduled meetings.
Compensation and Organizational Development Committee
The Compensation and Organizational Development Committee (the “Compensation Committee”) assists the Board in the review and approval of executive compensation and the oversight of organizational and management development for executive officers and other employees of Intuit. The Compensation Committee periodically reviews Intuit’s key management from the perspectives of leadership development, organizational development and succession planning through Intuit’s High Performance Organization Review. As part of this process, the Compensation Committee also meets with key senior executives. The systemic assessment of Intuit’s organization and talent planning helped the Compensation Committee to evaluate Intuit’s efforts at hiring, developing and retaining executives in an increasingly competitive environment, with the goal of creating and growing Intuit’s “bench strength” at the most senior executive levels.
Each member of this Committee is independent under NASDAQ listing standards and is a “Non-Employee Director,” as defined in Rule 16(b)-3 under the Securities Exchange Act of 1934, as amended, and an “outside director” under Section 162(m) of the Internal Revenue Code of 1986, as amended. The Compensation Committee held a portion of each meeting in closed session, with only the Compensation Committee members and, on certain occasions, William Campbell, who served as Chairman of the Board until the Company’s 2016 Annual Meeting of Stockholders in January 2016, present. For more information on the responsibilities and activities of the Compensation Committee, including the committee’s processes for determining executive compensation, see the “Compensation and Organizational Development Committee Report” on page 40 and “Compensation Discussion and Analysis” beginning on page 41, including in particular, the discussion of the “Role of Compensation Consultants, Executive Officers and the Board in Compensation Determinations” beginning on page 60.
The Compensation Committee is also responsible for reviewing the compensation for non-employee directors on an annual basis and making recommendations to the Board, in the event the Committee determines changes are appropriate.
Compensation Committee Interlocks and Insider Participation
None of Ms. Nora Johnson, Ms. Greene, Mr. Kangas, Mr. Dalzell or Mr. Weiner, each of whom served on the Compensation Committee during fiscal 2016, has at any time been one of our executive officers or employees. No executive officer of Intuit during fiscal 2016 served, or currently serves, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on Intuit’s Board or Intuit’s Compensation Committee.
Nominating and Governance Committee
The Nominating and Governance Committee reviews and makes recommendations to the Board regarding Board composition and appropriate governance standards. Our Board has determined that each member of the Nominating and Governance Committee is independent, as defined under applicable NASDAQ listing standards.
The Nominating and Governance Committee has adopted a process to identify and evaluate candidates for director, whether recommended by management, Board members, or stockholders (if made in accordance with the procedures set forth below under “Stockholder Recommendations of Director Candidates”). The Committee’s policy is to evaluate candidates properly recommended by stockholders in the same manner as candidates recommended by others.

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Qualifications of Directors
The Nominating and Governance Committee believes that all nominees for Board membership should possess the highest ethics, integrity and values and be committed to representing the long-term interests of Intuit’s stockholders. In addition, nominees should have broad, high-level experience in business, government, education, technology or public interest. They should have sufficient time to carry out their duties as directors of Intuit and have an inquisitive and objective perspective, practical wisdom and mature judgment. The Nominating and Governance Committee will also consider additional factors – such as independence, diversity, expertise and specific skills, and other qualities that may contribute to the Board’s overall effectiveness – when evaluating candidates for director. The Nominating and Governance Committee may also engage third-party search firms to provide assistance in identifying and evaluating Board candidates.
Consideration of director candidates typically involves a series of discussions and a review of available information concerning the candidate, the existing composition of the Board and other factors the Committee deems relevant. In conducting its review and evaluation, the Nominating and Governance Committee may solicit the views of management, other Board members and other individuals it believes may have insight into a candidate.
In considering diversity in the selection of nominees, the Nominating and Governance Committee looks for individuals with varied professional experience, background, knowledge, skills and viewpoints in order to achieve and maintain a group of directors that, as a whole, provides effective oversight of the management of the Company. Although our nomination policy does not prescribe specific standards for diversity, the Board and the Nominating and Governance Committee do look for nominees with a diverse set of skills that will complement the existing skills and experience of our directors and provide an overall balance of diversity of perspectives, backgrounds and experiences. The Nominating and Governance Committee assesses its effectiveness in this regard as part of its annual evaluation process. Our Board is currently composed of a group of leaders with broad and diverse experience in many fields, including: management of large global enterprises; technology and innovation leadership; strategic planning; consumer software and technology products and services; public policy; social networking; financial services; legal and compliance; executive compensation; and corporate governance. Our Board members have acquired these diverse skills through their accomplished careers and their service as executives and directors of a wide range of other public and private companies.
Stockholder Recommendations of Director Candidates
As discussed above, our Nominating and Governance Committee will consider director candidates recommended by a stockholder. A stockholder seeking to recommend a candidate for the committee’s consideration should submit the candidate’s name and qualifications to: Nominating and Governance Committee, c/o Corporate Secretary, Intuit Inc., P.O. Box 7850, Mail Stop 2700, Mountain View, California 94039-7850 or via our website at http://investors.intuit.com/corporate-governance/conduct-and-guidelines/contact-the-board/default.aspx. You may find a copy of a document entitled “Process of Identifying and Evaluating Nominees for Director” on our website http://investors.intuit.com/corporate-governance/conduct-and-guidelines/default.aspx.
In addition, our bylaws permit a stockholder or group of up to 20 stockholders who have owned 3% or more of Intuit’s outstanding shares that are entitled to vote generally in the election of directors continuously for at least three years to submit director nominees (for the greater of 2 directors or up to 20% of our Board) for inclusion in our proxy materials if the stockholder(s) provide timely written notice of such nomination and the stockholder and nominee satisfy the requirements specified in our bylaws. Stockholders who wish to nominate directors for inclusion in our proxy materials or directly at an Annual Meeting of Stockholders in accordance with the procedures in our bylaws should follow the instructions under “Stockholder Proposals and Nominations for the 2018 Annual Meeting” section of this proxy statement.

12



Stockholder Engagement Process

Intuit regularly engages with stockholders to better understand their perspectives. During fiscal 2016 we held discussions with many of our largest stockholders during scheduled events, including our annual meeting and investor day, as well as in private meetings throughout the year.

In September 2016 we hosted our annual investor day, during which our management team interacted directly with our stockholders regarding our performance in the prior year as well as our short- and long-term growth strategies. In addition, members of the management team, and on occasion, the Lead Independent Director, held private in-person and telephonic meetings with stockholders to discuss their perspectives and feedback on various topics including executive compensation, corporate governance, cybersecurity, board structure and succession planning, our board evaluation process, and diversity, enterprise risk management and sustainability.

Since the beginning of fiscal 2016, management met with stockholders holding 33% of our outstanding shares. Management, the investor relations team and our Lead Independent Director, who participate in stockholder engagement meetings, regularly share stockholder feedback with relevant Board committees and the full Board. In general, feedback from our stockholders regarding our compensation programs and corporate governance practices is very positive. The Board carefully considers the feedback from stockholders and has implemented such feedback into our proxy disclosures and corporate governance practices, such as amending our bylaws to provide for proxy access.

We will continue to engage with our stockholders on a regular basis in order to understand their perspectives and incorporate their feedback, as appropriate, on our performance, business strategies, executive compensation programs and corporate governance practices.
Stockholder Communications with the Board
The Nominating and Governance Committee is responsible for receiving stockholder communications on behalf of the Board. Any stockholder may send communications by mail to the Board or individual directors c/o Corporate Secretary, Intuit Inc., P.O. Box 7850, Mail Stop 2700, Mountain View, California 94039-7850 or via our website at http://investors.intuit.com/corporate-governance/conduct-and-guidelines/contact-the-board/default.aspx. The Board has instructed the Corporate Secretary to review this correspondence and determine, in his or her discretion, whether matters submitted are appropriate for Board consideration. The Corporate Secretary may also forward certain communications elsewhere in the Company for review and possible response. In particular, communications such as product or commercial inquiries or complaints, job inquiries, surveys, business solicitations, advertisements or patently offensive or otherwise inappropriate material will not be forwarded to the Board.

13


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership Table
The following table shows shares of Intuit’s common stock that we believe are owned as of October 31, 2016 by:
Each Named Executive Officer (defined on page 41);
Each director and nominee;
All current directors, nominees and executive officers as a group; and
Each stockholder beneficially owning more than 5% of our common stock.
Unless indicated in the notes, each stockholder has sole voting and investment power for all shares shown, subject to community property laws that may apply to create shared voting and investment power. Unless indicated in the notes, the address of each beneficial owner is c/o Intuit Inc., P.O. Box 7850, Mountain View, California 94039-7850.
We calculated the “Percent of Class” based on 257,067,597 shares of common stock outstanding on October 31, 2016. In accordance with SEC regulations, we also include (1) shares subject to options that are currently exercisable or will become exercisable within 60 days of October 31, 2016, and (2) shares issuable upon settlement of RSUs that are vested but unreleased, or will become vested and settled within 60 days of October 31, 2016. Those shares are deemed to be outstanding and beneficially owned by the person holding such option or RSU for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
Name of Beneficial Owner
 
Amount and Nature of Beneficial Ownership (#)
 
Percent of Class (%)
Directors, Director Nominees and Executive Officers:
 
 

 
 

Scott D. Cook(1)
 
12,934,313

 
5.03
%
Brad D. Smith(2)
 
857,662

 
*

R. Neil Williams(3)
 
178,740

 
*

Sasan K. Goodarzi(4)
 
259,707

 
*

H. Tayloe Stansbury(5)
 
57,230

 
*

Daniel A. Wernikoff(6)
 
174,884

 
*

Eve Burton(7)
 
961

 
*

Richard L. Dalzell(8)
 
5,424

 
*

Diane B. Greene(9)
 
29,987

 
*

Suzanne Nora Johnson(10)
 
30,831

 
*

Dennis D. Powell(11)
 
31,780

 
*

Raul Vazquez
 

 
*

Jeff Weiner(12)
 
18,220

 
*

All current directors and executive officers as a group (15 people)(13)
 
14,730,493

 
5.70
%
Other 5% Stockholders:
 
 

 
 

BlackRock, Inc.(14)
 
18,411,014

 
7.16
%
Capital World Investors(15)
 
17,255,000

 
6.71
%
The Vanguard Group(16)
 
15,503,587

 
6.03
%

_______________________________________
 
Indicates ownership of 1% or less.
(1)
Represents 12,782,312 shares held by trusts of which Mr. Cook is a trustee and 152,001 shares held by a trust Mr. Cook has investment control over, but of which he is not a trustee.
(2)
Includes 649,374 shares issuable upon exercise of options held by Mr. Smith.

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(3)
Includes 174,013 shares issuable upon exercise of options and upon settlement of vested restricted stock units held by Mr. Williams.
(4)
Includes 259,707 shares issuable upon exercise of options held by Mr. Goodarzi.
(5)
Includes 56,560 shares issuable upon exercise of options and upon settlement of vested restricted stock units held by Mr. Stansbury.
(6)
Includes 171,307 shares issuable upon exercise of options and upon settlement of vested restricted stock units held by Mr. Wernikoff.
(7)
Includes 961 shares issuable upon settlement of vested restricted stock units held by Ms. Burton.
(8)
Includes 5,424 shares issuable upon settlement of vested restricted stock units held by Mr. Dalzell.
(9)
Includes 15,094 shares issuable upon settlement of vested restricted stock units held by Ms. Greene.
(10)
Includes 15,094 shares issuable upon settlement of vested restricted stock units held by Ms. Nora Johnson.
(11)
Includes 15,094 shares issuable upon settlement of vested restricted stock units held by Mr. Powell.
(12)
Represents 18,220 shares issuable upon settlement of vested restricted stock units held by Mr. Weiner.
(13)
Includes 1,509,312 shares issuable upon exercise of options and upon settlement of vested restricted stock units. Represents shares and options held by the 13 individuals in the table, plus an additional 22,290 outstanding shares and 128,464 shares issuable upon exercise of options and upon settlement of vested restricted stock units held by other executive officers.
(14)
Ownership information for BlackRock, Inc. (“BlackRock”) is based on a Schedule 13G/A filed with the SEC on January 26, 2016 by BlackRock, reporting ownership as of December 31, 2015. BlackRock reported sole voting power as to 15,369,718 shares and sole dispositive power as to 18,411,014 shares. The address of BlackRock is 55 East 52nd Street, New York, New York 10022.
(15)
Ownership information for Capital World Investors (“Capital World”) is based on a Schedule 13G filed with the SEC on February 12, 2016 by Capital World, reporting ownership as of December 31, 2015. Capital World reported sole voting power and sole dispositive power as to 17,255,000 shares. The address of Capital World is 333 Hope Street, Los Angeles, California 90071.
(16)
Ownership information for The Vanguard Group (“Vanguard”) is based on a Schedule 13G/A filed with the SEC on February 10, 2016 by Vanguard, reporting ownership as of December 31, 2015. Vanguard reported sole voting power as to 494,119 shares, shared voting power over 26,100 shares, sole dispositive power as to 14,982,006 shares, and shared dispositive power as to 521,581 shares. The address of Vanguard is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.

Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires Intuit’s directors and executive officers, and greater-than-10% stockholders to file forms with the SEC to report their ownership of Intuit shares and any changes in ownership. Anyone required to file forms with the SEC must also send copies of the forms to Intuit. We have reviewed all forms provided to us. Based on that review and on written information given to us by our executive officers and directors, we believe that all Section 16(a) filing requirements were met during fiscal 2016.

15


PROPOSAL NO. 1
ELECTION OF DIRECTORS

Election of Directors
The board currently consists of nine directors, all of whom were nominated for election to the Board at the 2017 Annual Meeting based on the recommendation of our Nominating and Governance Committee. Mr. Vazquez, who was appointed to the Board in May 2016, was recommended for consideration by the Nominating and Governance Committee at that time by Scott Cook. Mr. Vazquez’s name was provided to a third party search firm, who presented several candidates, including Mr. Vazquez, to the Board of Directors, for consideration. The Board conducted interviews of multiple candidates before concluding that Mr. Vazquez was the best match for the Board’s needs.
Each nominee, if elected, will serve until the next annual meeting of stockholders and until a qualified successor is elected, unless the nominee dies, resigns or is removed from the Board prior to such meeting. Although we know of no reason why any of the nominees would not be able to serve, if any nominee is unable to serve or for good cause does not serve, the proxy holder will vote your shares to approve the election of any substitute nominee proposed by the Board or just for the remaining nominees, leaving a vacancy. Alternatively, the Board may reduce the size of the Board.
Each of our director nominees is currently serving on the Board. If a nominee who is currently serving as a director is not re-elected, Delaware law provides that the director would continue to serve on the Board as a “holdover director.” However, in accordance with Intuit’s Bylaws and Corporate Governance Principles, each director has submitted an advance, contingent, irrevocable resignation that the Board may accept if stockholders do not elect the director. In that situation, our Nominating and Governance Committee would make a recommendation to the Board about whether to accept or reject the resignation, or whether to take other action. The Board would act on the Nominating and Governance Committee’s recommendation, and publicly disclose its decision and the rationale behind it within 90 days of the date that the election results were certified.
Intuit is committed to ongoing Board refreshment, while at the same time valuing the experience that our longer-tenured directors bring. Four of our nine directors have served on our Board for fewer than five years. These four directors constitute more than fifty percent of our seven independent directors.
Directors Standing for Election
Information concerning the nominees for director is provided below.

eveburtonhresbackadjv2.jpg
Eve Burton (Age 58)
Senior Vice President and General Counsel, The Hearst Corporation
 
Ms. Burton has been an Intuit Director since January 2016 and is a member of the Audit and Risk Committee and the Acquisition Committee. Ms. Burton has served as Senior Vice President and General Counsel of The Hearst Corporation, a diversified media company, since March 2012. She joined The Hearst Corporation in 2002 as Vice President and General Counsel. Ms. Burton is also a member of Hearst CEO’s
strategic advisory group and of the Hearst Venture Investment Committee. She also serves as an Adjunct Professor of Constitutional Law and Journalism at the Columbia University Graduate School of Journalism. Prior to joining The Hearst Corporation, Ms. Burton was Vice President and Chief Legal Officer of CNN from 2000 to 2001. Ms. Burton serves on the board of The Hearst Corporation and was a member of the AOL board of directors from 2013 to 2015 until its acquisition by Verizon Communications Inc. Her non-profit board affiliations include the David and Helen Gurley Brown Institute for Media Innovations at Stanford and Columbia Universities and the board of trustees of Middlebury College. Ms. Burton holds a Juris Doctorate from Columbia University.

Relevant Expertise
Ms. Burton brings to the Board legal and business experience as a general counsel for a global company engaged in a broad range of diversified communications activities and strategic partnerships and investments. She also brings insights into operational and security issues facing online consumer services companies as well as an expertise in the area of government relations.

Other Public Company Boards
None



16


scottcookbw.jpg
Scott D. Cook (Age 64)
Founder and Chairman of the Executive Committee, Intuit Inc.

Mr. Cook has been an Intuit director since 1984. A co-founder of Intuit, Mr. Cook served as Intuit’s President and Chief Executive Officer from 1984 to 1994 and served as Chairman of the Board from 1993 to 1998. Mr.
Cook was a director of eBay Inc. from 1998 to 2015 where he was a member of the Corporate Governance and Nominating Committee. Mr. Cook has been a director of The Procter & Gamble Company since 2000
where he chairs the Innovation & Technology Committee and is a member of the Compensation & Leadership Development Committee. Mr. Cook holds a Bachelor of Arts in Economics and Mathematics from the University of Southern California and a Master in Business Administration from Harvard Business School.

Relevant Expertise
Mr. Cook brings to the Board experience as an entrepreneur and corporate executive with a background in guiding and fostering innovation at companies in technology and other sectors, as well as his knowledge of Intuit’s operations, markets, management and strategy and his experience as a Board member of other large, global, consumer-focused companies.

Other Public Company Boards
The Procter & Gamble Company


rickdalzellbw.jpg
Richard L. Dalzell (Age 59)
Former Senior Vice President and Chief Information Officer, Amazon.com, Inc.

Mr. Dalzell has been an Intuit director since January 2015 and is a member of the Audit and Risk Committee and chairs the Acquisition Committee. Mr. Dalzell was Senior Vice President and Chief Information Officer at Amazon.com, Inc., an online retailer, until his retirement in 2007. Previously, Mr. Dalzell served in numerous other positions at Amazon.com, Inc., including Senior Vice President of Worldwide Architecture
and Platform Software and Chief Information Officer from 2001 to 2007, Senior Vice President and Chief Information Officer from 2000 to 2001 and Vice President and Chief Information Officer from 1997 to 2000. Prior to his employment with Amazon.com, Inc., Mr. Dalzell was Vice President of the Information Systems Division at Wal-Mart Stores, Inc. from 1994 to 1997. Since 2014, Mr. Dalzell has been a director of Twilio, Inc., where he is a member of the Nominating and Governance Committee. Mr. Dalzell was a director of AOL.com, Inc. from 2009 until its acquisition by Verizon Communications Inc. in 2015. Mr. Dalzell holds a Bachelor of Science degree in Engineering from the United States Military Academy at West Point.

Relevant Expertise
Mr. Dalzell brings to the Board extensive experience, expertise and background in Internet information technology, platform software, cloud computing and cybersecurity, as well as a global perspective, gained from his service as the Chief Information Officer of Amazon.com, Inc. He also brings corporate leadership experience gained from his service in various senior executive roles at Amazon.com, Inc.

Other Public Company Boards
Twilio, Inc.



17


dianegreenbw.jpg
Diane B. Greene (Age 61)
Senior Vice President, Google Inc.

Ms. Greene has been an Intuit director since 2006 and is a member of the Compensation and Organizational Development Committee and chairs the Nominating and Governance Committee. Ms. Greene has served as the Senior Vice President of Enterprise Business at Google Inc. since December 2015. She has also served on the board of directors of Alphabet Inc. (and before its restructuring, Google Inc.) since January 2012. Ms.
Greene co-founded VMware, Inc. in 1998 and took the company public in 2007. Ms. Greene served as chief executive officer and president of VMware from 1998 to 2008, a member of the board of directors of VMware from 2007 to 2008, and as an Executive Vice President of EMC Corporation from 2005 to 2008. Prior to VMware, Ms. Greene held technical leadership positions at Silicon Graphics, Tandem, and Sybase and was chief executive officer of VXtreme. In addition to Ms. Greene’s public company board experience, she is a member of The MIT Corporation. Ms. Greene holds a Bachelor of Arts in mechanical engineering from the University of Vermont, a Master of Science degree in naval architecture from the Massachusetts Institute of Technology and a Master of Science degree in computer science from the University of California, Berkeley.

Relevant Expertise
Ms. Greene brings to the Board experience and insight as a successful technology entrepreneur and former chief executive officer of a public company, as well as deep expertise and knowledge of cloud computing and software as a service businesses.

Other Public Company Boards
Alphabet, Inc.


suzannenorajohnsonbw.jpg
Suzanne Nora Johnson (Age 59)
Former Vice-Chairman, The Goldman Sachs Group

Ms. Nora Johnson has been an Intuit director since 2007 and Lead Independent Director since January 2016. She also chairs the Compensation and Organizational Committee and is a member of the Nominating and Governance Committee. Ms. Nora Johnson joined The Goldman Sachs Group in 1985 and held several management positions throughout her tenure including: Vice Chairman, Chairman of the Global Markets
Institute, and Head of the Global Investments Research Division. Ms. Nora Johnson has been a member of the board of directors of: American International Group, Inc. since 2008; Pfizer Inc. since 2007; and VISA Inc. since 2007. Ms. Nora Johnson’s significant non-profit board affiliations include, among others, TechnoServe and the University of Southern California. Ms. Nora Johnson earned a Bachelor’s degree from the University of Southern California and a Juris Doctor from Harvard Law School.

Relevant Expertise
Ms. Nora Johnson brings to the Board valuable business experience managing large, complex, global institutions as well as insights into how changes in the financial services industry, public policy and the macro-economic environment affect our businesses.

Other Public Company Boards
American International Group, Inc.
Pfizer Inc.
VISA Inc.



18


dennispowellbw.jpg
Dennis D. Powell (Age 68)
Former Chief Financial Officer, Cisco Systems, Inc.

Mr. Powell has been an Intuit director since 2004 and is Chairman of the Audit and Risk Committee and a member of the Acquisition Committee. Mr. Powell was executive advisor of Cisco Systems, Inc. from 2008 to 2010. Mr. Powell joined Cisco in 1997 and held several management positions throughout his tenure including: Executive Vice President and Chief Financial Officer from 2003 to 2008; Senior Vice President,
Corporate Finance Vice President from 2002 to 2003; and Corporate Controller from 1997 to 2002. Prior to Cisco, Mr. Powell held the position of senior partner at Coopers & Lybrand LLP, where his tenure spanned 26 years. Mr. Powell has been a member of the board of directors of Applied Materials, Inc. since 2007 and served on the board of directors of VMware, Inc. from 2007 until 2015. Mr. Powell holds a Bachelor of Science in Business Administration with a concentration in accounting from Oregon State University.

Relevant Expertise
Mr. Powell brings to the Board executive management experience with large, global organizations as well as deep financial expertise and insights into operational issues, which he has gained through his tenure as an executive at a large public technology company.

Other Public Company Boards
Applied Materials, Inc.


bradsmithbw.jpg
Brad D. Smith (Age 52)
Chairman, President and Chief Executive Officer, Intuit Inc.

Mr. Smith has been an Intuit director since 2008 and Chairman of the Board since January 2016 and is currently Chairman, President and Chief Executive Officer of Intuit. Mr. Smith joined Intuit in 2003 and has served as Senior Vice President and General Manager, Small Business Division from 2006 to 2007, Senior Vice President and General Manager, QuickBooks from 2005 to 2006, Senior Vice President and General Manager,
Consumer Tax Group from 2004 to 2005 and as Vice President and General Manager of Intuit’s Accountant Central and Developer Network from 2003 to 2004. Before joining Intuit, Mr. Smith held the position of Senior Vice President of Marketing and Business Development of ADP, where he held several executive positions from 1996 to 2003. Mr. Smith served on the board of directors of Yahoo! Inc. from 2010 until 2013. Mr. Smith was elected to the board of directors of Nordstrom, Inc. in June 2013, where he chairs the Audit Committee and serves on the Technology Committee. Mr. Smith holds a Bachelor’s degree in Business Administration from Marshall University and a Master’s degree in Management from Aquinas College.

Relevant Expertise
Mr. Smith, as Chairman and Chief Executive Officer of Intuit, brings to the Board the most relevant knowledge of Intuit’s strategy, markets, operations and employees and provides industry expertise and context on all matters that come before the Board.

Other Public Company Boards
Nordstrom, Inc.



19


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Raul Vazquez (Age 45)
Chief Executive Officer and Director, Oportun

Raul Vazquez has been an Intuit director since May 2016 and serves as a member of the Audit and Risk Committee and the Acquisition Committee. Mr. Vazquez has served as chief executive officer and board member of Oportun, a financial technology company since April 2012. Prior to joining Oportun, Vazquez spent nine years at Walmart in various senior leadership roles, including executive vice president and
president of Walmart West, chief executive officer of Walmart.com, and executive vice president of Global eCommerce for developed markets. Mr. Vazquez previously worked in startup companies in e-commerce, at a global strategy consulting firm focused on Fortune 100 companies and as an industrial engineer for Baxter Healthcare. Mr. Vazquez also served as a member of the board of directors of Staples, Inc. from 2013 to June 2016. In September 2015, Mr. Vazquez was named to the Federal Reserve Board’s Community Advisory Council and currently serves as its chair, and in August 2016, Mr. Vazquez was named to the Consumer Financial Protection Bureau’s Consumer Advisory Board. Mr. Vazquez received a Bachelor of Science and a Master of Science degree in industrial engineering from Stanford University and an MBA from the Wharton Business School at the University of Pennsylvania.

Relevant Expertise
Mr. Vazquez brings to the Board a wide range of experience in innovative consumer financial products, retail, marketing, e-commerce, technology and community development, as well as corporate leadership experience with global organizations.

Other Public Company Boards
None


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Jeff Weiner (Age 46)
Chief Executive Officer, LinkedIn Corporation

Mr. Weiner has been a director of Intuit since April 2012 and is a member of the Compensation and Organizational Development Committee and Nominating and Governance Committee. He has served as the Chief Executive Officer of LinkedIn, an Internet professional network provider, since June 2009, and as a director of LinkedIn since July 2009. The acquisition of LinkedIn by Microsoft Corp. is pending. He served
as LinkedIn’s Interim President from December 2008 until June 2009. Before joining LinkedIn, Mr. Weiner was an executive in residence at Accel Partners and Greylock Partners, both venture capital firms, from September 2008 to June 2009. From May 2001 to June 2008 he held several positions at Yahoo! Inc., one of the world’s largest digital media companies, including most recently as an Executive Vice President of Yahoo’s network division. He holds a bachelor’s degree in economics from The Wharton School at the University of Pennsylvania.

Relevant Expertise
Mr. Weiner brings to the Board experience and insights as the chief executive officer of a successful public technology company as well expertise and knowledge in social networking platforms, consumer web and mobile products.

Other Public Company Boards
LinkedIn Corporation



The Board recommends that you vote
FOR the election of each of the nominated directors.

20


DIRECTOR COMPENSATION

Overview

Our director compensation programs are designed to provide an appropriate incentive to attract and retain qualified non-employee board members. The Compensation Committee is responsible for reviewing the equity and cash compensation for directors on an annual basis and making recommendations to the Board, in the event the Compensation Committee determines changes are needed. The following table summarizes the fiscal 2016 compensation earned by each member of the Board other than Mr. Smith, whose compensation is described under “Executive Compensation” beginning on page 63.
Director Summary Compensation Table

Director Name
 
Fees Earned or Paid in Cash ($)
 
Stock Awards ($)(1)
 
All Other Compensation ($)
 
Total ($)
Eve Burton
 

(2)
 
424,896

(2)
 

 
 
424,896

William V. Campbell
 
200,000

(3) (5)
 

 
 

 
 
200,000

Scott D. Cook
 

 
 

 
 
1,090,000

(4)
 
1,090,000

Richard L. Dalzell
 

(2)
 
367,419

(2)
 

 
 
367,419

Diane B. Greene
 
102,500

 
 
259,955

 
 

 
 
362,455

Edward A. Kangas
 
30,000

(5)
 

 
 

 
 
30,000

Suzanne Nora Johnson
 
139,375

 
 
259,955

 
 

 
 
399,330

Dennis D. Powell
 
122,500

 
 
259,955

 
 

 
 
382,455

Raul Vazquez
 
45,000

 
 
269,976

 
 

 
 
314,976

Jeff Weiner
 

(2)
 
344,953

(2)
 

 
 
344,953

_______________________________________
(1)
These amounts represent the aggregate grant date fair value of RSUs granted during fiscal 2016, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, “Compensation – Stock Compensation,” (“FASB ASC Topic 718”), assuming no forfeitures. Please see the “Equity Grants to Directors During Fiscal Year 2016” and “Outstanding Equity Awards for Directors at Fiscal Year-End 2016 (Exercisable and Unexercisable)” tables for information regarding the grant date fair value of RSUs granted during the fiscal year and the number of awards outstanding for each director at the end of the fiscal year.
(2)
Ms. Burton, Mr. Dalzell, and Mr. Weiner elected to receive fees due them for service on the Board and Committees during calendar year 2016 in RSUs, in accordance with Intuit’s Director Compensation Program, which is tied to the calendar year rather than Intuit’s fiscal year. These RSUs were awarded in January 2016 and are in respect of service provided during calendar year 2016 (which includes the first quarter of Intuit’s fiscal 2017). Please see the “Equity Grants to Directors During Fiscal Year 2016” table for more information.
(3)
This amount represents a stipend paid to Mr. Campbell for his role as a member and Non-Executive Chairman of the Board, in accordance with the compensation program adopted by the Board which became effective in January 2012.
(4)
Mr. Cook is an employee of Intuit; thus, he is not compensated as a director. Mr. Cook’s compensation represents an annual salary of $550,000 and an incentive bonus of $540,000 awarded for service in fiscal 2016. Mr. Cook did not receive any equity awards from Intuit during fiscal 2016.
(5)
Mr. Campbell and Mr. Kangas did not stand for re-election to Intuit’s Board in January 2016.


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Equity Grants to Directors During Fiscal Year 2016
The following table shows each RSU grant made to each of our directors, other than Mr. Smith, during fiscal 2016, including the grant date, number of shares, and grant date fair value.
 
 
Stock Awards
Director Name
 
Grant Date
 
Shares Subject to Award (#)
 
Grant Date Fair Value
($)(1)
Eve Burton
 
1/22/2016
 
2,777

(2)
259,955

Eve Burton
 
1/22/2016
 
801

(3)
74,982

Eve Burton
 
1/22/2016
 
961

(4)
89,959

Scott D. Cook
 
 
 

 

Richard L. Dalzell
 
1/22/2016
 
2,777

(2)
259,955

Richard L. Dalzell
 
1/22/2016
 
1,148

(4)
107,464

Diane B. Greene
 
1/22/2016
 
2,777

(2)
259,955

Suzanne Nora Johnson
 
1/22/2016
 
2,777

(2)
259,955

Dennis D. Powell
 
1/22/2016
 
2,777

(2)
259,955

Raul Vazquez
 
5/5/2016
 
1,942

(5)
194,977

Raul Vazquez
 
5/5/2016
 
747

(6)
74,999

Jeff Weiner
 
1/22/2016
 
2,777

(2)
259,955

Jeff Weiner
 
1/22/2016
 
908

(4)
84,998


_______________________________________
(1)
These amounts represent the aggregate grant date fair value of these awards computed in accordance with FASB ASC Topic 718 assuming no forfeitures. The grant date fair value of these awards is equal to the closing market price of Intuit’s common stock on the date of grant. See Intuit’s Annual Report on Form 10-K for the fiscal year ended July 31, 2016 for more information on the valuation of RSUs.
(2)
Annual Non-Employee Board Member grant which, subject to the director’s continued service, vests as to 100% of the shares on January 1, 2017.
(3)
Initial Non-Employee Board Member grant which, subject to the director’s continued service, vests as to 50% of the shares on January 22, 2017 and 50% on January 22, 2018.
(4)
Represents RSUs awarded pursuant to a Conversion Grant (described below under “Annual Retainer and Equity Compensation Program for Non-Employee Directors”) for shares equivalent in fair value on the date of grant to annual retainers for Board and Committee service for calendar year 2016.
(5)
Prorated Annual Non-Employee Board Member grant which, subject to the director’s continued service, vests as to 100% of the shares on May 1, 2017.
(6)
Initial Non-Employee Board Member grant which, subject to the director’s continued service, vests as to 50% of the shares on May 1, 2017 and 50% on May 1, 2018.

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Outstanding Equity Awards for Directors at Fiscal Year-End 2016 (Exercisable and Unexercisable)
The following table provides information on the outstanding equity awards held by our directors, other than Mr. Smith, as of July 31, 2016.

Director Name
 
Aggregate Shares Subject to Outstanding Stock
Awards (#)
 
Eve Burton
 
4,539

(1)
Scott D. Cook
 

 
Richard L. Dalzell
 
8,620

(2)
Diane B. Greene
 
17,871

(3)
Suzanne Nora Johnson
 
17,871

(3)
Dennis D. Powell
 
17,871

(3)
Raul Vazquez
 
2,689

 
Jeff Weiner
 
20,997

(4)
_______________________________________

(1) Includes 721 vested RSUs on which settlement is deferred in accordance with Intuit’s Director Equity Compensation Plan.
(2) Includes 5,137 vested RSUs on which settlement is deferred in accordance with Intuit’s Director Equity Compensation Plan.
(3) Includes 15,094 vested RSUs on which settlement is deferred in accordance with Intuit’s Director Equity Compensation Plan.
(4) Includes 17,993 vested RSUs on which settlement is deferred in accordance with Intuit’s Director Equity Compensation Plan.


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Annual Retainer and Equity Compensation Program for Non-Employee Directors
The Compensation Committee periodically reviews best practices and considers how the Company’s compensation program for non-employee directors compares to the programs of its compensation peers. In conducting this review, the Compensation Committee relies upon information provided to it by FW Cook. The current compensation program approved by our Board for our non-employee directors and the Chairman of the Board has been in effect since January 2012, with the exceptions of an increase in the stipend for the Compensation Committee Chair from $17,500 to $20,000 in January 2014 and a further increase from $20,000 to $25,000 effective January 2016, the increase in the annual cash stipend paid to the Chairman of the Board in lieu of participation in the non-employee director cash compensation program from $240,000 for calendar year 2013 to $260,000 effective January 2014, and the addition of an annual cash stipend for the Lead Independent Director of $40,000 effective January 2016. In October 2016, the Compensation Committee recommended, and the Board of Directors approved, amending the 2005 Equity Incentive Plan to provide that annual aggregate grant date fair value (computed as of the date of grant in accordance with applicable financial accounting rules) of all awards granted to any non-employee director during any single calendar year (not including awards granted in lieu of retainers or other cash payments), will not exceed $625,000, with such limit to be increased by an additional $250,000 for any Lead Independent Director or Non-Employee Director Chairman of the Board, which amendment is subject to approval by the Company’s stockholders, as further described under Proposal 3 below.
Annual Retainer
Non-employee directors are paid annual cash retainers for Board membership, plus additional cash retainers for their committee service in the amounts indicated in the following table:
Position
 
Annual Amount ($)
Non-Employee Board Member
 
60,000

Lead Independent Director
 
40,000

Members of each of Audit and Risk Committee, Acquisition Committee, and Compensation and Organizational Development Committee
 
15,000

Members of the Nominating and Governance Committee
 
10,000

Audit and Risk Committee Chair*
 
32,500

Compensation and Organizational Development Committee Chair*
 
25,000

Acquisition Committee and Nominating and Governance Committee Chairs*
 
17,500


* Committee chair retainers are in addition to committee membership retainers.

These annual retainers are paid in quarterly installments and are pro-rated for any changes to a committee that occurs during any quarter. Directors may elect to defer cash retainers into additional tax-deferred Intuit stock units by making an irrevocable written election prior to the start of each calendar year. Such tax-deferred stock units, known as Conversion Grants, vest in four installments, commencing on the grant date (which is the first business day following the Company’s annual meeting of stockholders) and quarterly thereafter, and will be distributable at the earlier of (i) five years from the date of grant, (ii) separation from the Board, or (iii) a change in control of the ownership of Intuit. We reimburse non-employee directors for out-of-pocket expenses incurred in connection with attending Board and committee meetings.

Director Equity Compensation Program

Grants are made to non-employee directors in the form of a fixed dollar value of RSUs in the following amounts:
Board Position
 
Fixed Amount of Award ($)
Non-Employee Board Member (annual grant)
 
260,000

New Board Member (additional grant upon joining Board)
 
75,000


Because the formula is based on a fixed dollar amount, the number of RSUs awarded annually to non-employee directors may vary, depending on the closing market price of Intuit’s common stock on the date of grant. The annual grants will be awarded on the day following each Annual Meeting of Stockholders. For a new Board Member, the annual grant will be prorated based on the number of full months of expected service until the next Annual Meeting of Stockholders. Subject to the director’s continued service, vesting of the annual RSU grants will occur on the first day of the twelfth month following the

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date of grant. For example, for grants made in January 2017, the vesting date would be January 1, 2018. A new Board Member’s additional grant will vest in two equal installments over two years. Once RSUs vest, settlement of the awards must be deferred until the earlier of (i) five years from the date of grant, (ii) separation from the Board, or (iii) a change in control of Intuit. Directors may defer settlement of their RSUs for a longer period of time at their option.
All of the RSUs that we grant to our Board Members have dividend rights, which are accumulated and paid when the shares are issued.
Director Stock Ownership Requirement
    
Each director is required to hold shares of Intuit common stock with an aggregate value of five times the amount of the annual Board member retainer, which value will be measured as of July 31st of each year. Unvested RSUs and vested deferred RSUs held by a Board member are counted as shares when determining the number of shares owned. Directors must comply with the new guidelines within five years after the date the director joins the Board. If any director does not meet the stock ownership requirement within this time frame, 50% of his or her annual cash retainers will be made in the form of Intuit stock until compliance is achieved. As of July 31, 2016, each of the current directors is in compliance with this policy.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Intuit’s Audit and Risk Committee has selected Ernst & Young LLP (“Ernst & Young”) as the independent registered public accounting firm to perform the audit of Intuit’s consolidated financial statements and the effectiveness of internal control over financial reporting for the fiscal year ending July 31, 2017. As a matter of good corporate governance we are asking stockholders to ratify this selection. Representatives of Ernst & Young are expected to attend the Meeting. They will have the opportunity to make a statement at the Meeting if they wish to do so and will be available to respond to appropriate questions from stockholders. If the selection of Ernst & Young is not ratified, the Audit and Risk Committee will consider whether it should select another independent registered public accounting firm.
The Audit and Risk Committee’s Policy on Pre-Approval of Services Performed by the Independent Registered Public Accounting Firm
It is the policy of the Audit and Risk Committee to pre-approve near the beginning of each fiscal year all audit and permissible non-audit services to be provided by the independent registered public accounting firm during that fiscal year. The Audit and Risk Committee authorizes specific projects within categories of services, subject to a budget for each project. The Audit and Risk Committee may also pre-approve particular services during the fiscal year on a case-by-case basis. The independent auditor and management periodically report to the Audit and Risk Committee the actual fees incurred versus the pre-approved budget.
Fees Paid to Ernst & Young
The following table shows fees that we paid (or accrued) for professional services rendered by Ernst & Young for fiscal 2016 and 2015:

Fee Category
 
Fiscal
2016
 
Fiscal
2015
Audit Fees
 
$
4,635,000

 
$
4,098,000

Audit-Related Fees
 
69,000

 
91,000

Tax Fees
 

 
51,000

All Other Fees
 

 

Total Fees
 
$
4,704,000

 
$
4,240,000

Audit Fees
These fees consist of amounts for professional services rendered in connection with the integrated audit of our financial statements and internal control over financial reporting, review of the interim financial statements included in quarterly reports, and statutory and regulatory filings or engagements.


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Audit-Related Fees
Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements, including agreed-upon audit procedures that focus on a specific business process. For fiscal 2016, audit-related fees consisted of fees for agreed-upon procedures for our Consumer Tax business. For fiscal 2015, audit-related fees consisted of fees for agreed-upon procedures for our Mint Bills and Consumer Tax businesses.
Tax Fees
Intuit paid no tax fees to Ernst & Young in fiscal 2016. Tax fees paid to Ernst & Young in fiscal 2015 were for international tax services in connection with an acquisition.
All Other Fees
Intuit paid no other fees to Ernst & Young in fiscal 2016 or fiscal 2015.
For more information about Ernst & Young, please see the “Audit and Risk Committee Report” on page 27.
Approval of this Proposal No. 2 requires the affirmative vote of the majority of the shares of common stock entitled to vote on this proposal that are present in person or represented by proxy at the Meeting and are voted “for” or “against” the proposal. Abstentions will not affect the outcome of the vote on this proposal. Brokers may exercise their discretion to vote on this Proposal since this is a routine matter (if you hold your shares in street name and do not provide voting instructions to the broker, bank or other nominee that holds your shares).
The Board recommends that you vote
FOR the ratification of the selection of Ernst & Young LLP.



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AUDIT AND RISK COMMITTEE REPORT
We, the members of the Audit and Risk Committee, assist the Board in fulfilling its responsibilities by overseeing Intuit’s accounting and financial reporting processes, the qualifications, independence and performance of Intuit’s independent auditor, the performance of Intuit’s internal audit department and Intuit’s internal controls. We also are responsible for selecting, evaluating and setting the compensation of Intuit’s independent auditor. Intuit’s management is responsible for the preparation, presentation and integrity of Intuit’s financial statements, including setting accounting and financial reporting principles and designing Intuit’s system of internal control over financial reporting. The Audit and Risk Committee has selected the independent registered public accounting firm of Ernst & Young as Intuit’s independent auditor, with responsibility for performing an independent audit of Intuit’s consolidated financial statements and for expressing opinions on the conformity of Intuit’s audited financial statements with generally accepted accounting principles and on the effectiveness of Intuit’s internal control over financial reporting based on their audit. The Audit and Risk Committee oversees the processes, although members of the Audit and Risk Committee are not engaged in the practice of auditing or accounting.
During the fiscal year ended July 31, 2016, the Audit and Risk Committee carried out the duties and responsibilities as outlined in its charter, including the following specific actions:
Reviewed and discussed with management and the independent auditor Intuit’s quarterly earnings announcements, consolidated financial statements, and related periodic reports filed with the SEC;
Reviewed with management its assessment of the effectiveness of Intuit’s internal control over financial reporting;
Reviewed with the independent auditor and management the audit scope and plan;
Reviewed the internal audit plan with the internal auditor; and
Met in periodic executive sessions with each of the independent auditor, representatives of management, and the internal auditor.
We reviewed and discussed with management and representatives of Ernst & Young the audited financial statements for the fiscal year ended July 31, 2016 and Ernst & Young’s opinion on the audited financial statements and the effectiveness of Intuit’s internal control over financial reporting. Ernst & Young represented that its presentations included the matters required to be discussed with the Audit and Risk Committee by applicable auditing standards of the Public Company Accounting Oversight Board (PCAOB).
The Audit and Risk Committee recognizes the importance of maintaining the independence of Intuit’s independent auditor, both in fact and appearance. Consistent with its charter, the Audit and Risk Committee has evaluated Ernst & Young’s qualifications, independence and performance. The Audit and Risk Committee has concluded that provision of the services described in that section is compatible with maintaining the independence of Ernst & Young. In addition, we have received the written disclosures and the letter from Ernst & Young required by applicable requirements of the PCAOB regarding Ernst & Young’s communications with us concerning independence and discussed with Ernst & Young the firm’s independence.
Based on the reports, discussions and review described in this report, and subject to the limitations on our role and responsibilities referred to in this report and in the charter, we recommended to the Board that the audited financial statements be included in Intuit’s Annual Report on Form 10-K for fiscal 2016. We also selected Ernst & Young as Intuit’s independent registered public accounting firm for fiscal 2017.
AUDIT AND RISK COMMITTEE MEMBERS
Dennis D. Powell (Chair)
Eve Burton
Richard L. Dalzell
Raul Vazquez

27


TRANSACTIONS WITH RELATED PERSONS
The Audit and Risk Committee is responsible for review, and approval or ratification as appropriate, of transactions between Intuit (or its subsidiaries) and any “related person” of Intuit. Under SEC rules, “related persons” include directors, officers, nominees for director, 5% stockholders, and their immediate family members. The Audit and Risk Committee adopted a written set of procedures, which are described below, to evaluate these transactions and obtain approval or ratification by the Audit and Risk Committee.
Identification of Related Persons.  Information about our directors and executive officers and persons related to them and their affiliated entities is collected and updated through annual Director & Officer Questionnaires and quarterly director affiliation summaries. Directors and executives provide the names of their immediate family members as well as the entities with which they and their immediate family members are affiliated, including board memberships, executive officer positions, and charitable organizations.
Audit and Risk Committee Annual Pre-Approval.  On an annual basis, Intuit’s procurement and legal departments prepare requests for pre-approval of transactions or relationships involving related persons or parties with which Intuit is expected to do business during the upcoming fiscal year. The Audit and Risk Committee reviews these requests during its regular fourth quarter meeting and generally pre-approves annual spending levels for each transaction or relationship.
Periodic Approvals.  During the year, the list of known related persons is circulated to appropriate Intuit employees and is used to identify transactions with related persons. When Intuit identifies an actual or potential transaction with a related person that was not pre-approved by the Audit and Risk Committee, Intuit’s legal department collects information regarding the transaction, including the identity of the other party, the value of the transaction, and the size and significance of the transaction to both Intuit and the other party. This information is provided to the Audit and Risk Committee, which in its discretion may approve, ratify, rescind, place conditions upon, or take any other action with respect to the transaction.
Monitoring of Approved Transactions and Relationships.  Following approval by the Audit and Risk Committee, Intuit personnel review and monitor the transactions and relationships from time to time. If spending levels approach the limits approved by the Audit and Risk Committee, Intuit prepares and submits a new approval request to the Audit and Risk Committee for review at its next meeting.
Since the beginning of fiscal 2016, there have been no transactions and there currently are no proposed transactions in excess of $120,000 between Intuit (or its subsidiaries) and a related person in which the related person had or will have a direct or indirect material interest.

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PROPOSAL NO. 3
APPROVAL OF AMENDED AND RESTATED 2005 EQUITY INCENTIVE PLAN

General
In October 2004, our stockholders approved the 2005 Equity Incentive Plan (the “Plan”), which we designed to reflect our commitment to having best practices in both compensation and corporate governance. When originally approved in 2004, the Plan’s term ran through December 9, 2006. In each of 2005, 2006, 2007, 2008, 2009, 2011 and 2014, our stockholders approved extensions to the term of the Plan, increases to the number of shares available under the Plan, and certain other amendments as brought before the stockholders from time to time.
On October 19, 2016, Intuit’s Compensation and Organizational Development Committee approved an amendment and restatement of the Plan. This amendment and restatement: (1) increases the number of shares available for issuance under the Plan, (2) extends the term of the Plan, (3) introduces lower limits on equity grants under the Restated 2005 Plan to non-employee directors, (4) adds cash-based awards as a permissible type of award under the Plan, (5) makes some additions to the list of qualifying performance criteria, and (6) makes certain other amendments described more fully below. Although not all of the changes to the Plan are required to be approved by stockholders, we have included these discretionary amendments in a single amendment and restatement of the Plan that we are submitting for stockholder approval at the annual meeting.
In the discussion of this proposal, we refer to the currently existing version of the 2005 Equity Incentive Plan as the “Plan,” and we refer to the version of the 2005 Equity Incentive Plan in the event that the stockholders approve this proposal as the “Restated 2005 Plan.”
Material Amendments
The material differences between the Plan and the Restated 2005 Plan are described below. For further information on the terms of the Restated 2005 Plan as proposed, we encourage you to refer to the text of the Restated 2005 Plan, a copy of which has been filed with this proxy statement as Appendix B.
Increase in Share Reserve. Under the Restated 2005 Plan a total of 32,100,000 shares would be authorized for issuance for new awards, subject to stockholder approval of the Restated 2005 Plan, less grants made after July 31, 2016 (which grants are counted against the share pool at the fungible ratio described below). This reflects an increase of 23,110,386 shares to the 8,989,614 shares available for issuance as of July 31, 2016. The total historical authorization under the Restated 2005 Plan since its inception (including shares subject to outstanding awards and awards that have vested/exercised), if the Restated 2005 Plan is approved, will be 138,110,386. The share reserve for the Restated 2005 Plan will be reduced by one share for every one share that is subject to an option or stock appreciation right (“SAR”) granted after July 31, 2016 and 2.3 shares for every one share that is subject to an award other than an option or SAR granted after July 31, 2016. Assuming that aggregate equity awards are granted at levels consistent with recent historical practices, then we generally expect that the share reserve under the Restated 2005 Plan should be sufficient to cover the Company’s projected stock grants for a period of approximately three years, including the Company’s annual equity grants that are expected to be made in July 2019.
The following table shows certain information about the Plan, including outstanding awards, as of July 31, 2016:
Number of shares that will be authorized for future grant after stockholder approval of the Plan(1)
32,100,000
Number of stock options outstanding at 7/31/16
8,345,851
Number of full-value awards (restricted stock units and performance-based restricted stock units) outstanding at 7/31/16
9,038,518
Weighted average remaining term of outstanding options
6.07 years
Weighted average exercise price of outstanding options
$88.55
(1) Grants of stock-based awards other than options or SARs count against the authorization as 2.3 shares. The authorization will also be reduced by the number of shares granted between July 31, 2016 and the date of stockholder approval adjusted by the fungible ratio. Between July 31, 2016 and October 31, 2016, Intuit granted no options and 374,392 RSUs under the Plan. If all of the shares subject to these RSUs are issued, this would reduce the Plan’s share reserve by 861,102 shares (after adjusting the RSUs by the 2.3 fungible share ratio).
Director Limits. Under the Restated 2005 Plan, the aggregate grant date fair value (computed as of the date of grant in accordance with applicable financial accounting rules) of all awards granted to any non-employee director during any single calendar year (not including Awards granted in lieu of retainers or other cash payments), will not exceed $625,000, with such limit to be increased an additional $250,000 for any lead non-employee director or non-employee director who is chairman of the Board.

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Cash-Based Awards. Under the Restated 2005 Plan, the Company can grant cash-based awards pursuant to which a participant may become entitled to receive an amount based on satisfaction of enumerated performance or service criteria.
Qualifying Performance Criteria under Section 162(m) of the Internal Revenue Code (the “Code”). The Plan (both as originally designed and as proposed in the Restated 2005 Plan) is designed to permit the grant of awards that are intended to qualify as “performance-based compensation” not subject to Code Section 162(m)’s $1,000,000 deductibility cap, however, there can be no guarantee that amounts payable under the Plan will be treated as qualified “performance-based compensation” under Code Section 162(m). In general, in order to grant awards that qualify as “performance-based compensation” under Section 162(m) of the Code, the material terms of the performance goals under which compensation may be paid must be disclosed to and approved by the company’s stockholders at least once every five years. For purposes of Code Section 162(m), the material terms include (i) the individuals eligible to receive compensation, (ii) a description of the business criteria on which the performance goal is based, and (iii) the maximum amount of compensation that can be paid to an individual under the performance goal. With respect to the various types of awards under the Plan, each of these aspects is discussed below, and stockholder approval of the Restated 2005 Plan will constitute approval of each of these aspects of the Restated 2005 Plan for purposes of the approval requirements of Code Section 162(m). The material terms of the performance goals under which compensation may be paid were most recently approved by Intuit’s stockholders at our 2014 annual meeting.
Term. Currently, the term of the Plan is set to expire on October 29, 2023. The term of the Restated 2005 Plan would expire on January 19, 2027, unless extended by stockholder approval in the future.
Annual Stockholder Value Transfer Rate, Burn Rate and Overhang
We actively manage our long-term dilution by granting equity awards in accordance with an annual equity compensation budget that reflects both the amount required to attract and retain employees at each level of the Company and a cost that is reasonable relative to our market capitalization size, which we call the rate of stockholder value transfer (SVT). SVT is a cost-based burn rate measure that normalizes for the difference in compensation value between grants of options and full-value shares based on their relative grant date accounting value. Annual SVT shows the rate at which market capitalization value is transferred to employees through equity compensation awards, and is the primary measure used by Intuit in managing the overall annual equity compensation cost incurred. We believe that looking at the grant date fair value of equity compensation is important, because it reflects the equity compensation expense that reduces GAAP earnings.
The following table shows Intuit’s SVT for the preceding three fiscal years. Intuit’s average annual SVT cost of 1.56% was more than 25% below the 2.09% median of our compensation peer group over the last three years:
 
 
 
 
FY14
 
FY15
 
FY16
 
FY14-16 Avg.
a
 
Options Granted
 
2,206,000

 
1,981,000

 
2,553,000

 
2,246,667

b
 
Wtd. Avg. Exercise Price
 
$82.15
 
$106.86
 
$113.08
 
$100.70
c
 
Black-Scholes Fair Value %
 
26.0
%
 
18.1
%
 
18.0
%
 
20.7
%
d = a x b x c
 
Fair Value of Option Grants
 
$47,076,040
 
$38,411,590
 
$51,953,550
 
$45,813,727
e
 
RSUs/PSUs Granted
 
3,896,000

 
3,501,000

 
4,072,000

 
3,823,000

f
 
Wtd. Avg. Grant Price
 
$71.37
 
$89.58
 
$99.30
 
$86.75
g = e x f
 
Fair Value of RSU Grants
 
$278,057,520
 
$313,619,580
 
$404,349,600
 
$332,008,900
h = d + g
 
Fair Value of All Grants
 
$325,133,560
 
$352,031,170
 
$456,303,150
 
$377,822,627
i
 
Wtd. Avg. Market Cap
 
$20,734,400,000
 
$25,624,100,000
 
$26,382,650,000
 
$24,247,050,000
 
 
Wtd. Avg. Basic Shares Outstanding
 
285,000,000

 
281,000,000

 
262,000,000

 
276,000,000

j = h ÷ i
 
Gross Annual SVT Cost
 
1.57
%
 
1.37
%
 
1.73
%
 
1.56
%

An additional metric that we use to measure the cumulative dilutive impact of our equity program is fully diluted overhang (the sum of (1) the number of shares subject to equity awards outstanding, but not exercised or settled and (2) the number of shares available to be granted (in each case, with no adjustment for the fungible ratio), divided by the sum of (1) the total common shares outstanding at the end of the year, (2) the number of shares subject to equity awards outstanding but not exercised or settled, and (3) the number of shares available to be granted). Our overhang as of July 31, 2016 was 9.3%. If the Restated 2005 Plan is approved, our potential overhang as of that date would increase to 16.1% and then will decline over time.
The following are the factors that were material to the evaluation of the Compensation and Organizational Development Committee, with input from management and its outside consultant, in determining acceptable and targeted levels of dilution: competitive data from relevant peer companies, the current and future accounting expense associated with Intuit’s equity award

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practices, input from stockholders, and the standards of stockholder advisory firms. Intuit’s equity programs are revisited at least annually and assessed against these (and other) measures.
Request for Stockholder Approval
We believe that our ability to attract and retain qualified, high-performing employees is vital to our success and growth as a company given the importance of knowledge, innovation and talent for employees in our industry. Equity compensation is a very effective incentive and retention tool that encourages and rewards employee performance that aligns with stockholders’ interests. In addition, when the Company makes employee compensation decisions, equity grants are rendered in their cash equivalent value so that there is full transparency regarding the costs involved. We believe that the Restated 2005 Plan is an essential platform for motivating and retaining our employees, and we request your approval of the Restated 2005 Plan.
Approval of this Proposal No. 3 requires the affirmative vote of the majority of the shares of common stock entitled to vote on this proposal that are present in person or represented by proxy at the Meeting and are voted "for" or "against" the proposal. Abstentions and broker non-votes will not affect the outcome of the vote on this proposal.
The Board of Directors recommends that you vote
FOR the Intuit Inc. Amended and Restated 2005 Equity Incentive Plan.

Approval of the Restated 2005 Plan enables Intuit to achieve, among others, the following objectives:
1. The continued ability of Intuit to offer stock-based incentive compensation to Intuit’s eligible employees and non-employee directors. We are requesting approval of 23,110,386 additional shares for the Restated 2005 Plan, which will provide for grants for both new hires and current employees.
2. Furthering compensation and governance best practices. The Restated 2005 Plan incorporates a number of features that are widely considered to be best practices in compensation or corporate governance. The Restated 2005 Plan is administered by the Compensation Committee, which is comprised solely of directors who are “independent” based on the standards set forth by NASDAQ. The Restated 2005 Plan introduces lower limits on awards to non-employee directors. It includes a recoupment provision that mandates the forfeiture of gains related to performance-based awards of any participant whose fraud or misconduct is a significant contributing factor to any restatement of financial results. All options or SARs must have an exercise price that is at least 100% of the fair market value of the common shares on the date of grant. The Restated 2005 Plan prohibits Intuit from taking any of the following actions without stockholder approval: directly or indirectly reducing the exercise price of stock options or SARs or, when the exercise price of an outstanding option or SAR is above fair market value, amending the terms of such outstanding option or SAR to provide for the cancellation and re-grant or the exchange of such outstanding option or SAR for either cash or a new award with a lower (or no) exercise price. The Restated 2005 Plan also does not contain an evergreen feature (evergreen features provide for automatic replenishment of authorized shares available under an equity plan) and does not provide for any tax gross-ups or tax reimbursement in connection with any type of equity award that may be granted under its terms. In order to continue these best practices, we are requesting the term of the Plan be extended until January 19, 2027, resulting in the ability to continue granting awards under the Restated 2005 Plan until that date.
3. Providing qualifying “performance-based compensation” that is fully tax-deductible to Intuit. The Restated 2005 Plan contains all the provisions required under Section 162(m) of the Code to grant qualifying “performance-based compensation.” These provisions allow Intuit to tie the equity compensation of its most highly compensated executive officers whose compensation is regulated by this law to performance goals that align with stockholder objectives, while assuring that Intuit maintains the ability to fully deduct awards which are intended to qualify as “performance-based compensation” for purposes of deductibility under Code Section 162(m). Nevertheless, there can be no guarantee that amounts payable under the Plan will actually be treated as qualified “performance-based compensation” under Code Section 162(m) or that Intuit will not grant awards under the Plan that are not intended to qualify as “performance-based compensation” under Code Section 162(m).
Background on Stock Compensation at Intuit
We believe that employee stock ownership is a significant contributing factor in achieving superior financial performance. Historically, Intuit has granted stock options and RSUs to the majority of its newly hired employees, and its equity granting practices have been an important component of Intuit’s overall compensation program. Recognizing that stock-based compensation is a valuable and limited resource, Intuit has actively managed its use of stock-based compensation. To that end and consistent with our general pay-for-performance compensation philosophy, only our higher performing employees receive annual equity awards.
We believe that stock options align employees’ interests directly with those of other stockholders, because the employee only realizes value from an option if the stock price increases after the date of the award. We also believe that RSUs align employees’ interests directly with those of other stockholders, as they provide greater value to employees as Intuit’s stock price

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increases. Without stock-based compensation, Intuit would be at a disadvantage against competitors to provide the market-competitive total compensation packages that are necessary to attract, retain and motivate the employee talent critical to the future success of Intuit.
We strongly believe that our stock-based incentive programs and emphasis on employee stock ownership have been integral to our success in the past and will continue to be important to our ability to achieve superior performance in the years ahead. Therefore, we consider approval of the Restated 2005 Plan to be vital to Intuit’s continued success.
Purpose of the Plan
The Restated 2005 Plan will allow Intuit, under the direction of the Compensation Committee, to make broad-based grants of options, SARs, restricted stock awards, and RSUs to employees and non-employee directors, within the limits set forth in the Restated 2005 Plan. The purpose of these equity awards is to attract, retain and motivate talented employees and non-employee directors, further align their interests with those of our stockholders, and continue to link employee compensation with Intuit’s performance.
Key Terms of the Restated 2005 Plan
The following is a summary of the key provisions of the Restated 2005 Plan, as it would become effective if the stockholders approve this Proposal No. 3. This summary does not purport to be a complete description of all the provisions of the Restated 2005 Plan. A copy of the Restated 2005 Plan has been filed with this proxy statement as Appendix B, and the following description of the Restated 2005 Plan is qualified in its entirety by reference to that Appendix.

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Plan Termination Date:
 
January 19, 2027
 
 
 
Eligible Participants:
 
Employees of Intuit and its subsidiaries, non-employee directors of Intuit and certain advisors and consultants of Intuit and its subsidiaries are eligible to receive awards under the Plan. As of October 31, 2016, there were approximately 8,038 individuals eligible to participate in the Plan, including approximately 8,031 employees and seven non-employee directors. Intuit uses the services of a significant number of advisors and consultants at any given point in time, but Intuit has a long-standing practice of not granting awards under the Plan to its advisors and consultants, and at this time does not foresee changing that practice.
 
 
 
Closing Stock Price:
 
The closing price of Intuit’s common stock on NASDAQ on October 31, 2016 was $108.74.
 
 
 
Share Reserve:
 
Under the Restated 2005 Plan a total of 32,100,000 shares would be authorized for issuance for new awards, subject to stockholder approval of the Restated 2005 Plan, less grants made after July 31, 2016 (which grants are counted against the share pool at the fungible ratio described below). This reflects an increase of 23,110,386 shares to the 8,989,614 shares available for issuance as of July 31, 2016. The total historical authorization under the Restated 2005 Plan since its inception (including shares subject to outstanding awards and awards that have vested/exercised), if the Restated 2005 Plan is approved, will be 138,110,386 shares. The share reserve for the Restated 2005 Plan will be reduced by one share for every one share that is subject to an option or SAR granted after July 31, 2016 and 2.3 shares for every one share that is subject to an award other than an option or SAR granted after July 31, 2016. Shares that are subject to awards that have been forfeited, expired or settled for cash (in whole or part), or tendered or withheld in satisfaction of withholding tax liabilities arising from an award granted on or after July 21, 2016 other than an option or SAR will be added to the shares available for awards under the Restated 2005 Plan at the 2.3-to-one ratio described above.
 
 
 
Award Types:
 
(1) Non-qualified and incentive stock options
 
 
(2) Stock Appreciation Rights (SARs)
 
 
(3) Restricted Stock Awards
 
 
(4) Restricted Stock Units (RSUs)
(5) Cash-Based Awards
Fungible Share Reserve:
 
Each share subject to an option or SAR will reduce the share reserve by one (1) share, and each share subject to restricted stock or a RSU will reduce the share reserve by two and three-tenths (2.3) shares. Each share that is credited back to the Restated 2005 Plan (under the circumstances described above under “Share Reserve”) will increase the share reserve by one (1) share if the share had been subject to an option or SAR, and by two and three-tenths (2.3) shares if the share had been subject to a restricted stock or RSU award.
 
 
 

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162(m) Share Limits:
 
No more than 2,000,000 shares (3,000,000 for a new hire grant) may be made subject to awards to a single participant in any fiscal year. The maximum cash amount payable pursuant to all cash-based awards granted in any calendar year to any participant will not exceed five million dollars ($5,000,000). These limits are necessary for awards to qualify as performance-based compensation under Section 162(m) of the Code, and have been reduced by 50% from the prior limits in light of the increase in Intuit’s stock price (other than the cash limit, which is being added in connection with the addition of cash-based awards as a permissible award type under the Restated 2005 Plan), and are greater than the number of options or other awards that Intuit has granted to any individual in the past. These limits do not signal any intent on our part to significantly change our practices regarding the grant of equity awards or other awards to our executive officers.
 
 
 
162(m) Performance Criteria:
 
The grant or vesting of awards (other than options or SARs) that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code may be based on any one or more of the following performance criteria, or growth or other changes in the amount, rate or value of one or more performance criteria, either individually, alternatively or in any combination, applied to Intuit as a whole or to one or more business units or subsidiaries, either individually, alternatively or in any combination, and measured over a performance period to be determined by Intuit’s Compensation Committee, on an absolute basis or relative to a pre-established target, to previous results or to a designated comparison group, either based upon GAAP or non-GAAP financial results, in each case as specified by Intuit’s Compensation Committee (or subcommittee): (i) cash flow (before or after dividends), (ii) earnings per share (including earnings before interest, taxes, depreciation and/or amortization), (iii) stock price, (iv) return on equity, (v) total stockholder return, (vi) return on capital (including return on total capital or return on invested capital), (vii) return on assets or net assets, (viii) market capitalization, (ix) economic value added, (x) debt leverage (debt to capital), (xi) revenue or net revenue, (xii) income or net income, (xiii) operating income, (xiv) operating profit or net operating profit, (xv) operating margin or profit margin, (xvi) return on operating revenue, (xvii) cash from operations, (xviii) operating ratio, (xix) operating revenue, (xx) contract value, (xxi) client renewal rate, (xxii) operating cash flow return on income, (xxiii) adjusted operating cash flow return on income, (xxiv) employee productivity and satisfaction metrics, (xxv) market share, (xxvi) strategic positioning, or (xxvii) new product releases. These performance criteria may differ for awards granted to any one participant or to different participants.
 
 
 
Establishment of Performance Goals; Certification by Committees:
 
Intuit’s Compensation Committee (or subcommittee) will establish the performance goals with respect to awards (other than options or SARs) intended to qualify as “performance-based compensation” under Section 162(m) of the Code no more than ninety (90) days after the commencement of the period of service to which the performance goal relates (or, in the case of performance periods of less than one year, not later than the date upon which 25% of the performance period elapses), provided that the outcome of the performance goal is substantially uncertain at such time. The Compensation Committee (or subcommittee) is required to certify, in writing, the level of achievement of the performance goals prior to the payment, settlement or vesting of an award. Adjustments to the evaluation of the achievement of performance goals is permitted only in accordance with 162(m) and if timely approved in connection with the establishment of 162(m) performance criteria.
 
 
 

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Vesting:
 
Vesting of awards granted to employees is determined by the Compensation Committee and may be based on the completion of a specified period of service with Intuit, on the attainment of pre-established performance goals, on such other factors as the Compensation Committee determines, or on a combination of the foregoing. Although subject to change at any time at the Compensation Committee’s sole discretion, options and “time-based” RSUs granted to employees generally vest over three years. “Performance-based” RSUs generally vest over three years, contingent on the satisfaction of pre-established performance goals. RSUs issued to non-employee directors under our current grant program generally vest over a period of from one to two years, depending on the type of grant, and are generally subject to a mandatory deferral period of five years.
 
 
 
Other Award Terms:
 
Stock options and SARs will have a term no longer than ten years. Options and SARs will have an exercise price no less than 100% of the fair market value of Intuit’s common stock on the date of grant (except for certain options granted in connection with a merger or other acquisition as substitute or replacement awards).
 
 
 
 
 
Unless otherwise provided in an award agreement, upon termination of employment for any reason other than death or “Disability” (as defined in the Restated 2005 Plan), stock options will cease to vest. Options granted to directors, or to employees who have been actively employed by Intuit for at least one year, and in either case who die or incur a Disability will vest in full, unless otherwise provided in the award agreement. Upon termination of employment, restricted stock awards generally will cease to vest and the participant will be entitled to retain the shares only to the extent earned as of the date of termination. The effect of termination of service on SARs and RSUs is specified in the applicable award agreements.
 
 
 
 
 
Dividends or distributions paid with respect to shares subject to restricted stock awards will be retained by Intuit and paid to the applicable participant at the same time that the shares with respect to which such dividends or distributions were paid are released from the restrictions of the award. A participant will be entitled to receive dividend equivalent rights prior to the issuance of shares subject to RSUs to the extent and under the terms and conditions provided in the applicable award agreement. However, any such dividend equivalent rights that relate to RSUs that vest based on the achievement of performance goals will be paid upon the later of (i) the date dividends are paid to the common stockholders of Intuit, or (ii) the date the RSUs with respect to which such dividend equivalent rights are payable become vested, and will be forfeited to the extent the underlying award does not vest. Except with respect to RSUs, dividend equivalent rights will not be granted alone or in connection with any award under the Restated 2005 Plan.
 
 
 
Repricing Prohibited:
 
The Restated 2005 Plan prohibits Intuit from taking any of the following actions without stockholder approval: directly or indirectly reducing the exercise price of stock options or SARs or, when the exercise price of an outstanding option or SAR is above fair market value, amending the terms of such outstanding option or SAR to provide for the cancellation and re-grant or the exchange of such outstanding Option or SAR for either cash or a new award with a lower (or no) exercise price. Notwithstanding the foregoing in the event of a Corporate Transaction (as defined in the Restated 2005 Plan), any Option or SAR with an exercise price that equals or exceeds the value of the consideration to be paid to the holders of Intuit’s common stock (on a per share basis) may be cancelled without any consideration.
 
 
 

35


Recoupment of Awards
 
If Intuit issues a restatement of its financial results after the distribution of shares or cash upon settlement of an award with vesting conditioned on the achievement of performance goals, then a participant will be required to return to Intuit the value of the award that would not have vested or been issued based on the restated financial results. This recoupment provision applies to a participant whose fraud or misconduct was a significant contributing factor to the restatement of financial results.
Non-Transferability:
 
Awards granted under the Restated 2005 Plan are not transferable except by will or the laws of descent and distribution except that the Compensation Committee or its authorized delegates may consent to permit the transfer of an award other than an incentive stock option by gift or domestic relations order to an “authorized transferee” as defined in the Restated 2005 Plan. Transfers by an individual for consideration are prohibited.
 
 
 
Administration:
 
The Compensation Committee will administer the Restated 2005 Plan. To the extent required by applicable law (such as Section 162(m) of the Code or Rule 16b-3 under the Securities Exchange Act of 1934), certain awards may be administered by a qualifying subcommittee. The Restated 2005 Plan also allows the Compensation Committee to delegate to one or more officers of Intuit the ability to grant awards and take certain other actions with respect to participants who are not executive officers or directors, within such limits as the Compensation Committee establishes, and to approve certain changes to the forms and award agreements under the Restated 2005 Plan. The Compensation Committee will select the individuals who receive awards, determine the number of shares covered thereby, and, subject to the terms and limitations expressly set forth in the Restated 2005 Plan, establish the terms, conditions and other provisions of the awards. The Compensation Committee may interpret the Restated 2005 Plan and establish, amend and rescind any rules relating to the Restated 2005 Plan, including adoption of rules, procedures or sub-plans applicable to particular subsidiaries or employees in particular locations. The Compensation Committee may address unanticipated events and make all other determinations necessary or advisable for the administration of the Restated 2005 Plan.
 
 
 
Corporate Transactions:
 
In the event of a Corporate Transaction (as defined in the Restated 2005 Plan) involving Intuit, any outstanding awards granted under the Restated 2005 Plan may be assumed, continued, replaced, or substituted by the successor, which assumption, continuation, replacement, or substitution shall be binding on all participants. In the event such successor refuses to assume, continue, replace or substitute the awards, the awards will vest as to 100% of the underlying shares (based on such further terms and conditions, if any, provided in the applicable award agreement). A “Corporate Transaction” includes certain mergers, consolidations, or similar transactions; dissolutions or liquidations; certain sales or transfers of all or substantially all the assets of Intuit; and certain other transactions that qualify as a “corporate transaction” under Section 424(a) of the Code.
 
 
 
Amendment and Termination:
 
The Board may terminate, amend or suspend the Restated 2005 Plan, provided that no action may be taken by the Board to amend this Plan in any manner (including an amendment to reduce or permit the reduction of the exercise of an option or SAR) that requires stockholder approval pursuant to the Code or the regulations promulgated thereunder, or pursuant to the Securities Exchange Act of 1934 or any rule promulgated thereunder, or pursuant to NASDAQ rules. In addition, the Board may not amend an outstanding award in a manner that materially impairs the rights of a participant without such participant’s consent, except as expressly authorized in the Restated 2005 Plan.


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New Plan Benefits
Intuit’s executive officers and directors have an interest in approval of the Restated 2005 Plan because it relates to the issuance of equity awards for which executive officers and directors may be eligible. The benefits that will be awarded or paid under the Restated 2005 Plan to executive officers cannot currently be determined. Awards granted under the Restated 2005 Plan to executive officers are within the discretion of the Compensation Committee, and the Compensation Committee has not determined future awards or who might receive them. Although not required by the Restated 2005 Plan, and subject to change at any time at the Compensation Committee’s sole discretion, Intuit’s current approved program generally provides for an initial grant for non-employee directors of RSUs covering the number of shares equal to $75,000 and for an annual grant for non-employee directors of RSUs covering the number of shares equal to $260,000. Each non-employee director also has the ability to elect to convert all of the director’s cash retainer(s) otherwise payable to the director during a calendar year into RSUs.
Aggregate Past Grants Under the Plan
The table below shows, as to each Named Executive Officer and the various indicated groups, the aggregate number of shares of Intuit common stock subject to option grants, stock grants and RSU grants under the Plan since the Plan’s inception through October 31, 2016.

 
 
 
 
Number of
 
 
 
 
Restricted
 
 
 
 
Stock Units
 
 
Number of
 
and Restricted
 
 
Options
 
Shares
Name
 
Granted (#)
 
Granted (#)
 
 
 
 
 
 
 
Named Executive Officers:
 
 
 
 
 
 
Brad D. Smith
 
 
2,236,777

 
 
 
2,006,550

 
R. Neil Williams
 
 
609,346

 
 
 
646,459

 
Sasan K. Goodarzi
 
 
713,393

 
 
 
594,562

 
H. Tayloe Stansbury
 
 
348,590

 
 
 
396,730

 
Daniel A. Wernikoff
 
 
453,874

 
 
 
454,075

 
All executive officers as a group (8 persons) 
 
 
4,999,590

 
 
 
4,582,074

 
All non-executive directors as a group (7 persons)
 
 
507,500

 
 
 
137,774

 
All employees, excluding executive officers
 
 
61,538,533

 
 
 
35,625,626

 
U.S. Federal Tax Consequences
Stock option grants under the Restated 2005 Plan may be intended to qualify as incentive stock options under Section 422 of the Code or may be non-qualified stock options. Generally, no federal income tax is payable by a participant upon the grant of a stock option and no deduction is taken by the Company. Intuit’s practice has been to grant non-qualified stock options. Under current tax laws, if a participant exercises a non-qualified stock option, he or she will have taxable income equal to the difference between the fair market value of the common stock on the exercise date and the stock option exercise price. Intuit will be entitled to a corresponding deduction on its income tax return. A participant will have no taxable income upon exercising an incentive stock option provided that the applicable periods for holding the resulting shares of stock are satisfied (except that alternative minimum tax may apply), and Intuit will receive no deduction when an incentive stock option is exercised. The tax treatment for a participant of a disposition of shares acquired through the exercise of an option depends on how long the shares were held and on whether the shares were acquired by exercising an incentive stock option or a non-qualified stock option. Intuit may be entitled to a deduction in the case of a disposition of shares acquired under an incentive stock option before the applicable holding periods have been satisfied.
For restricted stock awards, no taxes are due when the award is initially made (unless the recipient makes a timely election under Section 83(b) of the Code), but the award becomes taxable when it is no longer subject to a “substantial risk of forfeiture” (i.e., becomes vested or transferable). Income tax is paid at ordinary rates on the value of the stock when the restrictions lapse, and then at capital gain rates when the shares are sold if the value of the stock increases after the vesting date. Similarly, for RSUs, the award generally becomes taxable when the shares vest. Income tax is paid at ordinary rates on the

37


value of the RSUs when the restrictions lapse, and then at capital gain rates when the shares are sold if the value of the stock increases after the vesting date.
A participant will have taxable income at the time a cash-based award becomes payable and, if the participant has timely elected deferral to a later date, at such later date. At these times, the participant will recognize ordinary income equal to the value of the amount then payable.
As described above, awards granted under the Restated 2005 Plan may qualify as “performance-based compensation” under Section 162(m) of the Code in order to preserve federal income tax deductions by Intuit with respect to annual compensation required to be taken into account under Section 162(m) that is in excess of $1 million and paid to Intuit’s Chief Executive Officer or any of the three other most highly compensated executive officers (excluding the Chief Financial Officer). To so qualify, options and other awards must be granted under the Restated 2005 Plan by a committee consisting solely of two or more “outside directors” (as defined under regulations) and satisfy the Restated 2005 Plan’s limits on the total number of shares (or cash value) that may be awarded to any one participant during Intuit’s fiscal year. In addition, for awards other than options or SARs to qualify as “performance-based compensation,” the issuance or vesting of the award, as the case may be, must be contingent upon satisfying performance goals based on one or more of the performance criteria described above, as established and certified by a committee consisting solely of two or more “outside directors.” The Compensation Committee may grant awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code, which awards would be subject to the $1 million deductibility limit of Code Section 162(m).
The Restated 2005 Plan has been drafted with the intention of avoiding the application of taxes under Section 409A of the Code to any participant on account of the grant, vesting, or settlement of awards.

EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth certain information, as of July 31, 2016, concerning securities authorized for issuance under all of Intuit’s equity compensation plans, excluding the additional shares we are proposing to add to the 2005 Equity Incentive Plan in Proposal No. 3 (share amounts in thousands).

Plan Category
 
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants and
Rights (#)
(a)
 
 
Weighted-
Average
Exercise
Price of
Outstanding
Options,
Warrants and
Rights ($)
(b)(1)
 
 
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
 
16,904

(2)
 
89.20

 
 
12,747

(5)
Equity compensation plans not approved by security holders
 
480

(3)
 
4.85

 
 

 
Total
 
17,384

(4)
 
88.55

 
 
12,747

 

_______________________________________
(1)
RSUs have been excluded for purposes of computing weighted average exercise prices.
(2)
Represents 8.282 million shares issuable upon exercise of options and 8.622 million shares issuable upon vesting of RSU awards, which are settled for shares of Intuit common stock on a one-for-one basis.
(3)
Represents 0.064 million shares issuable upon exercise of options and 0.416 million shares issuable upon vesting of RSU awards which were assumed in connection with corporate acquisitions.
(4)
Represents 8.346 million shares issuable upon exercise of options and 9.038 million shares issuable upon vesting of RSU awards.
(5)
Represents 8.990 million shares available for issuance under our 2005 Equity Incentive Plan and 3.757 million shares available for issuance under our Employee Stock Purchase Plan.


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PROPOSAL NO. 4
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
In accordance with Section 14A of the Securities Exchange Act of 1934, as amended, we are asking stockholders to approve the following advisory resolution at the Meeting:
RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed in this proxy statement pursuant to the SEC’s executive compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and the narrative discussion that accompanies the compensation tables), is hereby approved.
As described in the “Compensation Discussion and Analysis” section of this proxy statement, the guiding philosophy of the Compensation Committee is to establish a compensation program that is designed to compensate our executives based on both overall Company performance and individual employee performance; help achieve our corporate growth strategy; acquire, retain and motivate talented executives with proven experience; and have a greater portion of Named Executive Officer pay tied to short- and long-term incentive programs than most other Intuit employees, because they lead our key business units or functions, and thus have the ability to directly influence overall company performance.
Intuit employs a number of practices that reflect our pay-for-performance compensation philosophy, including:
A significant portion of our senior executive officer compensation is in the form of performance-based incentives, and in fiscal 2016, 50% of the annual equity incentive value granted as part of our regular equity grant cycle was in the form of performance-based RSUs, which measure relative TSR compared to a peer group;
We do not provide supplemental company-paid retirement benefits designed for executive officers;
We do not provide any excise tax “gross-up” payments;
We do not provide perquisites or other executive benefits based solely on rank;
We prohibit directors and executive officers from pledging Intuit stock and engaging in hedging transactions involving Intuit stock;
We have “clawback” provisions for operating performance-based equity awards and beginning in the 2016 fiscal year implemented “clawback” provisions for cash bonus payments under our Senior Executive Incentive Plan;
We have stock ownership guidelines for executive officers at the senior vice president level and above and non-employee directors, with the CEO guideline set at six times salary, the senior vice president level and above guideline set at one and a half times salary, and the non-employee director guideline set at five times retainer; and
The CEO’s service-based RSUs and Relative TSR RSUs granted in fiscal 2015 and 2016 include a mandatory one-year holding period, requiring the CEO to hold the underlying shares for at least one year after the awards vest.
Stockholders are urged to read the “Compensation Discussion and Analysis” section of this proxy statement, which discusses how our executive compensation policies and practices implement our compensation philosophy, and the “Executive Compensation” section of this proxy statement, which contains tabular information and narrative discussion about the compensation of our Named Executive Officers. The Compensation Committee and the Board believe that these policies and procedures are effective in implementing our compensation philosophy and in achieving its goals.
While the advisory vote to approve executive compensation is non-binding, the Compensation Committee, which is responsible for designing and administering our executive compensation program, values the opinions expressed by stockholders in their vote on this proposal, and will consider the outcome of the vote when making future compensation decisions for named executive officers.
We will continue to hold our say on pay votes on an annual basis until the next vote on the frequency of advisory votes, unless the Board of Directors modifies its policy prior to that time. A non-binding advisory vote on our executive compensation program will again be included in our proxy statement next year.
The Board recommends that you vote
FOR approval of the advisory resolution to approve executive compensation.


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COMPENSATION AND ORGANIZATIONAL DEVELOPMENT COMMITTEE REPORT
Set out below is the Compensation Discussion and Analysis, which is a discussion of Intuit’s executive compensation programs and policies written from the perspective of how we and management view and use such policies and programs. We strive to see that Intuit’s compensation programs are fiscally responsible, market responsive and performance based. Guided by these principles, we regularly review and monitor senior management’s compensation, as well as their potential for larger leadership roles, to produce the greatest value for Intuit’s three stakeholders – employees, customers and stockholders. To this end, the Compensation and Organizational Development Committee has reviewed the components of compensation paid to each of Intuit’s officers for fiscal 2016, including annual base salary, target incentive bonus and equity compensation.
Given our role in providing guidance on program design, administering those programs and policies, and in making specific compensation decisions for senior executives, the Compensation and Organizational Development Committee participated in the preparation of the “Compensation Discussion and Analysis” and reviewed and discussed the “Compensation Discussion and Analysis” with management. Based on the review and discussions, we recommended to the Board that the “Compensation Discussion and Analysis” be included in this proxy statement.
COMPENSATION AND ORGANIZATIONAL
DEVELOPMENT COMMITTEE MEMBERS
Suzanne Nora Johnson (Chair)
Diane Greene
Jeff Weiner


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COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
41
Compensation Practices
44
2016 “Say on Pay” Advisory Vote on Executive Compensation
46
Compensation Philosophy and Objectives
47
Specific Elements of Fiscal 2016 Compensation
47
Fiscal 2016 Named Executive Officer Compensation Decisions
53
Achievement of Performance Targets for July 2013 Performance-Based RSUs
56
Use of Competitive Data
58
Intuit’s Management Stock Purchase Program
59
Employee Benefits
60
Termination Benefits
60
Role of Compensation Consultants, Executive Officers and the Board in Compensation Determinations
60
Accounting and Tax Implications of Our Compensation Policies
61
Stock Ownership Guidelines
61
Intuit’s Policy Regarding Derivatives, Short Sales, Hedging and Pledging
61
Intuit’s Equity Granting Policy for Senior Executives
62
The Compensation and Organizational Development Committee (the “Compensation Committee”) oversees Intuit’s compensation plans and policies, approves compensation of our executive officers and administers our equity compensation plans. This Compensation Discussion and Analysis (“CD&A”) contains context for the compensation actions approved by the Compensation Committee and paid for fiscal 2016 to the executive officers named below (the “Named Executive Officers”) and included in the “Fiscal Year 2016 Summary Compensation Table” on page 63:
Brad D. Smith, Chairman, President and Chief Executive Officer
R. Neil Williams, Executive Vice President and Chief Financial Officer
Sasan K. Goodarzi, Executive Vice President and General Manager, Consumer Tax Group through April 30, 2016, and Executive Vice President and General Manager, Small Business Group, effective May 1, 2016
H. Tayloe Stansbury, Executive Vice President and Chief Technology Officer
Daniel A. Wernikoff, Executive Vice President and General Manager, Small Business Group through April 30, 2016, and Executive Vice President and General Manager, Consumer Tax Group, effective May 1, 2016
Executive Summary
Commitment to Pay for Performance
Our executive compensation programs are designed to reward both short- and long-term growth, as well as total stockholder return (“TSR”). Our short-term performance-based compensation consists of annual cash bonuses, which are based upon achievement of annual corporate operating goals, including revenue, non-GAAP operating income and deferred revenue balance at fiscal year end, as well as on an assessment of individual contribution and performance. Our fiscal 2016 long-term compensation consisted of 50% performance-based RSUs based on relative total stockholder return (“Relative TSR RSUs”), 25% service-based RSUs and 25% non-qualified stock options.
Fiscal 2016 Business Highlights
Intuit achieved revenue of $4.7 billion, GAAP operating income of $1.2 billion, non-GAAP operating income of $1.6 billion, GAAP diluted earnings per share (“EPS”) of $3.69 and non-GAAP diluted EPS of $3.78 (see table on page A-3 of this proxy statement for a reconciliation of non-GAAP financial measures) and a one-year TSR of 6.19% for fiscal 2016.
Our revenue, GAAP and non-GAAP operating income and GAAP and non-GAAP earnings per share for fiscal 2016 exceeded our guidance range.
Key highlights from fiscal 2016 include the following:

41


Fiscal 2016 revenue of $4.7 billion, an increase of 12% over fiscal 2015; GAAP operating income of $1.2 billion, an increase of 68% over the prior year, and non-GAAP operating income of $1.6 billion, up 36%; GAAP diluted earnings per share of $3.69, up from $1.28 in 2015, and non-GAAP diluted EPS of $3.78, up 46%, in each case, exceeding our guidance for the year; note that fiscal 2016 GAAP earnings per share includes $0.65 net income per share from discontinued operations and fiscal 2015 GAAP earnings per share includes $0.17 net loss per share from discontinued operations;
An increase of 15% in TurboTax Online units in the U.S., with total TurboTax units growing 12% (excluding the Free File Alliance, which is our free tax offering for eligible taxpayers);
The Consumer Tax business had revenue growth of 10% for fiscal 2016;
Two dozen product innovations in TurboTax, driving share growth in the do-it-yourself software category for the third year in a row;
An increase of 41% in total QuickBooks Online subscribers, reaching 1.513 million subscribers at the end of the 2016 fiscal year, including 45% growth in QuickBooks Online subscribers outside the U.S. to 287,000 and growth in QuickBooks Self-Employed subscribers from 25,000 to 85,000;
Continued momentum in the Small Business Online ecosystem with revenue growth of 25% for the year;
Online payroll customer growth of 17% and online active payments customers growth of 6%;
Continued discipline in the Company’s financial strategy, focusing on cash management and maintaining a strong balance sheet, including paying dividends of $0.30 per share each quarter, and the repurchase of $2.3 billion of shares in fiscal 2016, reducing our weighted average share count by 7%; and
Employee engagement and customer satisfaction scores that continued to reflect best-in-class levels, with Intuit continuing its run of 15 consecutive appearances in Fortune Magazine’s “Top 100 Places to Work” list and placing at #4 on Fortune Magazine’s “Most Admired Software Company” list.

42


Stockholder Value Delivered
Intuit’s TSR has performed well in recent years. Measured at the end of fiscal 2016, we delivered one-year TSR of 6.19%, three-year annualized TSR of 21.52% and five-year annualized TSR of 20.22%, with our stock price achieving an all-time high as the fiscal year came to a close. The graph below compares the cumulative TSR on Intuit common stock for the last five full fiscal years with the cumulative total returns on the S&P 500 Index and the Morgan Stanley Technology Index for the same period. It assumes that $100 was invested in Intuit common stock and in each of the other indices on July 31, 2011 and that all dividends were reinvested. Over this five-year period, Intuit’s TSR exceeded both the broad market (as evidenced by a comparison against the S&P 500 Index) and the overall technology sector (as evidenced by a comparison against the Morgan Stanley Technology Index). The comparisons in the graph below are based on historical data – with Intuit common stock prices based on the closing price on the dates indicated – and are not intended to forecast the possible future performance of Intuit’s common stock.
intu2016a01.jpg
 
July 31, 2011

July 31, 2012

July 31, 2013

July 31, 2014

July 31, 2015

July 31, 2016
Intuit Inc.
$
100.00


$
125.62


$
139.91


$
181.28


$
236.44


$
251.09

S&P 500
$
100.00


$
109.13


$
136.41


$
159.52


$
177.40


$
187.36

Morgan Stanley Technology Index
$
100.00


$
111.45


$
118.36


$
151.58


$
169.91


$
190.19




43



Compensation Practices
Intuit employs a number of practices that reflect our pay-for-performance compensation philosophy and are intended to provide total compensation that is competitive and related to both Intuit’s and individual performance:
Compensation Practices
ü   A significant portion of our fiscal 2016 senior executive officer compensation is in the form of incentives tied to achievement of particular performance measures;
ü   We have “clawback” provisions for operating performance-based equity awards and beginning in the 2016 fiscal year implemented “clawback” provisions for cash bonus payments under our Senior Executive Incentive Plan;
ü   We have stock ownership guidelines for executive officers at the senior vice president level and above and non-employee directors, with the CEO guideline set at six times salary, the senior vice president level and above guideline set at one and a half times salary, and the non-employee director guideline set at five times annual cash retainer;
ü   The CEO’s service-based RSUs and Relative TSR RSUs granted in fiscal 2015 and 2016 include a mandatory one-year holding period, requiring the CEO to hold the underlying shares for at least one year after the awards vest;
û We prohibit directors and executive officers from pledging Intuit stock or engaging in hedging transactions involving Intuit stock;
û   We do not provide supplemental company-paid retirement benefits designed for executive officers;
û   We do not provide any excise tax “gross-up” payments; and
û   We do not provide perquisites or other executive benefits based solely on rank.


44


Compensation Aligned with Stockholders’ Interests
As illustrated below, approximately 94% of target total direct compensation for Mr. Smith in fiscal 2016 was performance-based, consisting of 86% equity and 8% target annual cash bonus, ensuring a strong link between his target total direct compensation and the Company’s results. Only base salary, which is approximately 6% of his total target compensation, was fixed.

CEO Performance and Incentive Pay Mix - Target Total Compensation for Fiscal 2016
ceopiechart101016.jpg
More than 90% of the total direct compensation for all of our Named Executive Officers is delivered through programs that link pay realized by executive officers with financial and operational results and with TSR. Incentive payouts under our SEIP are based on revenue, non-GAAP operating income, and deferred revenue balance at fiscal year end, along with individual performance. Equity-based compensation consisting of Relative TSR RSUs, RSUs and non-qualified stock options align compensation with the long-term interests of Intuit’s stockholders by focusing our executive officers’ performance on both absolute and relative TSR. The following chart shows the allocation of the Named Executive Officers’ total direct compensation for fiscal 2016, reflecting the extent to which their total direct compensation for fiscal 2016 consisted of performance-based compensation.


45



Total Direct Compensation Mix for Fiscal 2016
neostackedbar102716.jpg
(1) Consistent with disclosure in the Fiscal 2016 Summary Compensation Table, equity awards are reported at grant date fair value, which, for the Relative TSR RSUs, are based on the target number of shares subject to the award, and salary and incentive cash are reported based on the actual amounts earned with respect to fiscal 2016.
2016 “Say on Pay” Advisory Vote on Executive Compensation
Intuit has provided stockholders with an advisory vote on executive compensation in each of the last five years. At our 2016 Annual Meeting of Stockholders, approximately 83.3% of the votes cast in the “say on pay” advisory vote were “FOR” approval of our executive compensation. The Compensation Committee evaluated the results of the 2016 advisory vote together with the other factors and data discussed in the CD&A in determining executive compensation policies and decisions.
We value the opinions of our stockholders and seek their input as part of our regular stockholder outreach efforts. Feedback we received from stockholders regarding our executive compensation program was generally very positive. With the exception of a single stockholder, we did not receive specific criticisms or recommended changes regarding our executive compensation program. The Compensation Committee had noted that the majority of shares cast “AGAINST” the “say on pay” proposal had been cast by a single affiliated stockholder group. Consequently, management and our Lead Independent Director engaged directly with that stockholder to better understand the reasons for its vote and provided its feedback to the Compensation Committee and the Board. As a result of this engagement, we have enhanced certain of our proxy disclosures.
After evaluating the outcome of the 2016 advisory vote, stockholder feedback and input from our independent compensation consultant, the Compensation Committee determined that our executive compensation program is aligned with our compensation philosophy and Company strategy, and the Committee decided not to make any material changes to our overall fiscal 2016 executive compensation policies and decisions.
The Committee will continue to consider stockholder feedback, input from our independent compensation consultant and the outcomes of future say on pay votes, when considering our executive compensation programs and policies and making compensation decisions for our Named Executive Officers.




46


Compensation Philosophy and Objectives
In setting policies and practices regarding compensation, the guiding philosophy of the Compensation Committee is to establish a compensation program that is designed to:
Help achieve our corporate growth and business strategy;
Compensate our executives based on both Company performance and individual performance;
Hire, retain and motivate talented executives with proven experience in an increasingly competitive market; and
Have a greater portion of Named Executive Officer pay opportunity tied to short- and long-term incentive programs than other Intuit employees, because these executives lead our key business units or functions and thus have the ability to directly influence overall Company performance.
The Compensation Committee believes that a mix of both cash and equity incentives is an effective compensation structure, as annual cash incentives reward executives for near-term operating results, while equity incentives motivate executives to execute on our long-term strategic plan in order to increase stockholder value. In determining the amount of the cash and equity incentives, the Compensation Committee considers each officer’s total compensation on both a short- and long-term basis to assess the retentive and incentive value of his or her overall compensation, while taking into consideration additional relevant factors, including, for example, market data, internal parity and stockholder and proxy advisor perspectives.
We manage equity compensation to provide competitive rewards that are commensurate with results delivered, while limiting dilution to stockholders. The Company is as careful and targeted when deploying stock-based compensation as it is when paying cash, and considers dilution and run rate in the context of peers when granting equity within its approved plans. When the Company makes employee compensation decisions, equity grants are rendered in their cash equivalent value so that there is full transparency regarding the costs involved.
Specific Elements of Fiscal 2016 Compensation
Compensation for all Named Executive Officers for fiscal 2016 is a mix of the principal components summarized in the following table and described in greater detail below.

Component of Compensation
 
Primary Purpose
 
 
 
Base Salary
 
Provide the security of a competitive fixed cash payment for services rendered
Annual Bonus
 
Reward achievement of annual company financial performance and individual strategic and operational objectives
Stock Options

 
Retain and motivate executives to build stockholder value over the life of the option, since options deliver value only if Intuit’s stock price appreciates after grant
Restricted Stock Units

 
Retain executives and provide alignment with stockholders’ interests during the vesting term (assuming the one-year GAAP operating income hurdle is met)
Relative TSR RSUs
 
Retain and align executives with stockholders for a minimum of three years and offer upside for strong positive returns to stockholders relative to similar alternative investments over 12, 24 and 36 month periods
The Compensation Committee conducts its annual review process near the end of each fiscal year to determine each executive’s cash bonus, equity awards and any adjustments to base salary and target cash bonus opportunities for the following year. This timing allows the Company’s financial results for the fiscal year and TSR performance to date to be taken into account when making compensation decisions for its executives.
Base Salary
Base salaries provide the security of a fixed cash payment for services rendered. In July 2016, the Compensation Committee reviewed the base salaries of our Named Executive Officers in the context of the compensation information provided by FW Cook, the Compensation Committee’s independent compensation consultant, to determine whether the base salaries of our Named Executive Officers were competitive with our compensation peer group and to ensure those salaries reflect each executive’s roles, responsibilities, experience and performance as further described under “Use of Competitive

47


Data” on page 58. The fiscal 2016 base salary decisions for each of our Named Executive Officers are described under “Fiscal 2016 Named Executive Officer Compensation Decisions” on page 53 below.
Annual Cash Bonuses
Intuit uses cash bonuses to reward achievement of annual Company financial performance and individual strategic and operational objectives, all of which align with stockholder value. All employees (other than those eligible to participate in certain sales and customer care incentive programs), including each of Intuit’s Named Executive Officers, have an annual bonus target that is a stated percentage of base salary determined by the individual’s role within Intuit. Bonus targets for the Named Executive Officers were set by the Compensation Committee based on the scope and significance of each executive’s leadership role at Intuit, and a review of market data. The target amounts are used as a starting point in the determination of cash bonuses, but actual bonus payments varied based on Company and individual performance, as discussed below.
Cash bonuses for our Named Executive Officers are paid out under the SEIP, a stockholder-approved plan designed to provide for payments that are intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code (“Section 162(m)”) as described in more detail below.
Funding of the Company’s bonus plans, including the SEIP, is based on Company performance against specific revenue and operating income targets, as described in more detail below. Each year, the Compensation Committee sets a Company performance target which must be achieved in order for any executive to be eligible to receive a cash bonus under the SEIP. At the close of fiscal 2016, the Compensation Committee certified that Intuit had exceeded the GAAP operating income threshold set at $600 million and thus each participant in the SEIP was eligible, but not entitled, to receive a cash bonus under that plan.
Fiscal 2016 SEIP Funding
The Compensation Committee set aggressive, equally-weighted performance goals based on Intuit’s (1) revenue, (2) non-GAAP operating income (see table on page A-3 of this proxy statement for a reconciliation of non-GAAP measures), and (3) year-end deferred revenue balance goals, to fund the SEIP, as set forth in the table below. The Committee believes that the achievement of these goals drives long term stockholder value, capturing both the need for continued revenue and income growth as well as the importance of the shift to a subscription-based model for some of our most important product offerings, measured by deferred revenue. The following table reflects the goals approved by the Committee for purposes of calculating the baseline funding of the SEIP, as well as the Company’s actual performance results.


48


Measure
 
Revenue ($ Billions)
 
Non-GAAP Operating Income ($ Billions)
 
Deferred Revenue Balance ($ Billions)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighting
 
33.3%
+
33.3%
+
33.3%
=
100%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Baseline
 
 
 
 
Bonus Pool
 
 
 
Bonus Pool
 
FY16
 
Bonus Pool
 
Company
 
 
 
 
Funding
 
FY16
 
Funding
 
Deferred
 
Funding
 
Performance
 
 
FY16
 
as a Percent
 
Operating
 
as a Percent
 
Revenue
 
as a Percent
 
as a Percent
 
 
Revenue
 
of Target*
 
Income (1)
 
of Target*
 
Balance
 
of Target*
 
of Target(2)
Maximum
 
$4.83
 
150%
 
$1.55
 
150%
 
$1.06
 
150%
 
150%
 
 
$4.78
 
133%
 
$1.54
 
133%
 
$1.04
 
133%
 
133%
 
 
$4.73
 
117%
 
$1.52
 
117%
 
$1.02
 
117%
 
117%
Target
 
$4.68
 
100%
 
$1.50
 
100%
 
$1.00
 
100%
 
100%
 
 
$4.60
 
95%
 
$1.48
 
95%
 
$0.96
 
95%
 
95%
 
 
$4.52
 
90%
 
$1.45
 
90%
 
$0.93
 
90%
 
90%
 
 
$4.44
 
85%
 
$1.43
 
85%
 
$0.90
 
85%
 
85%
 
 
$4.41
 
71%
 
$1.42
 
71%
 
$0.88
 
71%
 
71%
 
 
$4.37
 
57%
 
$1.40
 
57%
 
$0.86
 
57%
 
57%
 
 
$4.33
 
43%
 
$1.39
 
43%
 
$0.85
 
43%
 
43%
 
 
$4.29
 
28%
 
$1.38
 
28%
 
$0.83
 
28%
 
28%
 
 
$4.25
 
14%
 
$1.37
 
14%
 
$0.81
 
14%
 
14%
Threshold
 
$4.21
 
—%
 
$1.35
 
—%
 
$0.80
 
—%
 
—%
Actual
 
$4.69
 
105%
 
$1.56
 
150%
 
$1.00
 
100%
 
119%

______________________________________
* Linear interpolation between defined points.
(1) Financial performance may be adjusted for restructuring charges, litigation-related expenses, and/or non-recurring asset write-downs, but no such adjustments were made.
(2) This represents a baseline for the funding of the company-wide bonus pool. The Compensation Committee has discretion to adjust the actual SEIP payment levels for each participant up to a maximum of 250% of the participant’s base salary, not to exceed $5 million.
The baseline funding of the SEIP was 119.4% of target, based on Company revenue of $4.69 billion, non-GAAP operating income of $1.56 billion, and deferred revenue of $1.00 billion in fiscal 2016.
Determination of Cash Bonuses
Eligible senior executives, including our Named Executive Officers, were awarded bonuses from the SEIP, and those bonuses were based on the full Company results described above, and not the performance of any particular functional group or business unit. The Compensation Committee adjusted the cash bonuses of each of the Named Executive Officers relative to the 119.4% baseline funding by 16% to 30% per individual, based on their individual performance during the 2016 fiscal year, as evaluated by the Compensation Committee and recommended by the CEO (for all Named Executive Officers except himself). The actual bonus payouts to our Named Executive Officers were in the range of 138% to 155% of their individual target bonus.
The fiscal 2016 bonus decisions for each of our Named Executive Officers are described under “Fiscal 2016 Named Executive Officer Compensation Decisions” on page 53 below.

49


Fiscal 2016 Long-Term Incentives
For the fiscal 2016 regular annual awards granted in July 2016, Relative TSR RSUs comprised half of the annual equity value granted to our Named Executive Officers when measured by grant date fair value, and the other half was split evenly between service-based RSUs and stock options.
Relative TSR RSUs
Relative TSR RSUs comprised fifty percent of the value of the regular annual long-term equity awards for fiscal 2016. Relative TSR RSUs cliff vest after a three-year period and are earned based on Intuit’s three-year relative TSR compared to a pre-established peer group, with three discrete performance periods covering 12, 24 and 36 months. Shares earned based on the 12- and 24- month relative TSR performance periods have an additional service-based vesting requirement, such that all of the earned shares “cliff vest” following the end of the 36-month period. In addition, Mr. Smith is required to hold the shares that he earns under the relative TSR RSU awards for one year following vesting to ensure longer term alignment with stockholders. Performance-based awards ensure that a meaningful share of our executives’ equity compensation is contingent upon future outperformance compared to a peer group rather than continued employment or the appreciation of the Company’s stock alone.
Further, our Relative TSR RSUs align the interests of award holders and stockholders by rewarding award holders for better than average stockholder return compared to other software companies since target shares are based on achieving TSR at the 60th percentile. The 60th percentile target position is to ensure that Intuit must perform better than the majority of the relative TSR peers to earn the target number of shares. The three year vesting schedule serves as a retention incentive and as a means of measuring and requiring maintenance of longer-term stock price performance. The use of discrete periods of 12, 24 and 36 months aims to minimize the potential impact of short-term share price volatility over the duration of the three-year performance period. The Company believes that this approach focuses Named Executive Officers on long-term stockholder return.
Our TSR peer group was identified using objective selection criteria recommended by FW Cook, our independent compensation consultant. All are U.S.-based public companies within Intuit’s General Industry Classification Standard (“GICS”) code that have market capitalization and revenue greater than 0.25x Intuit’s size, plus H&R Block, which is a direct, size-relevant competitor (the “TSR Peers”). The TSR Peers were chosen so that the Relative TSR RSUs will reward the Named Executive Officers based on objective measurement of Intuit’s one-, two- and three-year return compared to similar companies in which an Intuit stockholder might reasonably be expected to invest. The Committee believes that having 48 TSR Peers ensures that, in spite of mergers or acquisitions of TSR Peers, the Company will maintain a robust peer group against which it can measure its TSR. The stockholder return of both Intuit and the TSR Peers is measured using a thirty trading-day average at the start and the end of each performance period. The purpose of this averaging period is to reduce the effect of daily stock market volatility on the measurement of TSR.
There is a “target” payout, which is earned when Intuit’s performance is at the 60th percentile of the peers for the applicable performance period. These payouts may be as high as 200% of target if Intuit’s TSR reaches the 100th percentile of the TSR Peers for the performance period and may be as low as 0% of target if performance is below the 25th percentile of the TSR Peers for the performance period. The payouts are capped at 100% of target in the event that Intuit’s relative TSR is above the 60th percentile of the TSR Peers, but absolute TSR is negative over any of the three performance periods, in order to avoid particularly large award earnouts for outperforming peers in falling markets when Intuit’s stockholders do not earn a positive return. The table below describes the percent of target that may be earned under these awards based on relative TSR:

50


 
TSR
Percentile
Rank(1)
 
Shares Earned
as a Percent
of Target(2)
Maximum
100

 
200.0
%
 
95

 
187.5
%
 
90

 
175.0
%
 
85

 
162.5
%
 
80

 
150.0
%
 
75

 
137.5
%
 
70

 
125.0
%
 
65

 
112.5
%
Target
60

 
100.0
%
 
55

 
95.0
%
 
50

 
90.0
%
 
45

 
80.0
%
 
40

 
70.0
%
 
35

 
60.0
%
 
30

 
50.0
%
 
25

 
40.0
%
Threshold
< 25.0

 
%
_______________________________________
(1)
Linear interpolation between defined points.
(2)
Payouts capped at 100% if absolute TSR is negative over any of the three performance periods.

The Relative TSR peer group contains a wider software company sample than the companies we compete with directly for talent and is not the same as the peer group used to benchmark executive compensation. The 48 Relative TSR Peers are set forth below:
Relative TSR Peer Companies
Accenture plc
 
Computer Sciences Corporation
 
Paychex, Inc.
Activision Blizzard, Inc.
 
eBay, Inc.
 
PayPal Holdings, Inc.
Adobe Systems Incorporated
 
Electronic Arts, Inc.
 
Red Hat, Inc.
Akamai Technologies, Inc.
 
Facebook, Inc.
 
Sabre Corporation
Alliance Data Systems Corporation
 
Fidelity National Info Services, Inc.
 
salesforce.com, Inc.
Alphabet Inc.
 
First Data Corporation
 
Symantec Corporation
Amdocs Limited
 
Fiserv, Inc.
 
Synopsys, Inc.
Autodesk, Inc.
 
FleetCor Technologies, Inc.
 
Total System Services, Inc.
Automatic Data Processing, Inc.
 
Gartner, Inc.
 
Twitter Inc.
Broadridge Financial Solutions, Inc.
 
Global Payments Inc.
 
Vantiv, Inc.
CA, Inc.
 
H&R Block, Inc.
 
Visa Inc.
Cadence Design Systems
 
IBM Corporation
 
VMware, Inc.
CDK Global
 
Mastercard Incorporated
 
The Western Union Company
Check Point Software Technologies, Ltd.
 
Microsoft Corporation
 
Workday, Inc.
Citrix Systems, Inc.
 
Open Text Corporation
 
Xerox Corporation
Cognizant Technology Solutions
 
Oracle Corporation
 
Yahoo! Inc.


51


The following changes were made to the Relative TSR Peer Group for 2016:
Relative TSR Peer Company Changes
Three 2015 TSR peer companies were removed in the fiscal 2016 award design because they no longer met the objective size requirement or are being acquired:
Equinix, Inc.
Teradata Corporation
LinkedIn Corporation
Eleven companies that met the size requirement were added:
Accenture plc
Amdocs Limited
Broadridge Financial Solutions, Inc.
Cadence Design Systems, Inc.
CDK Global, Inc.
First Data Corporation
Global Payments Inc.,
PayPal Holdings, Inc.
Sabre Corporation
Vantiv, Inc.
Workday, Inc
Service-Based RSUs
In fiscal 2016, 25% of the total value of the executive officers’ annual equity awards was made in the form of service-based RSUs. RSUs provide a link to stockholders’ interests because their value fluctuates with stock price and these RSUs also serve as a long-term incentive for officers to remain with Intuit as they receive no value unless they remain with the Company through the vesting period. In addition, the RSUs have a performance component, as the Company must achieve a one-year GAAP operating income hurdle before these RSUs will begin to vest, which qualifies the awards as deductible performance-based compensation under 162(m). These RSUs vest over three years, with one-third of the shares vesting in July of each year beginning in 2017, subject to achievement of the one-year GAAP operating income hurdle and continued service. Mr. Smith is required to hold his vested RSU shares for one year following vesting to support longer-term alignment with stockholders.
Stock Options
In fiscal 2016, 25% of the total value of the executive officers’ annual equity awards was made in the form of stock options. Stock options require price appreciation in order to be valuable awards and align holders with the specific goal of increasing stockholder value after the grant date. Stock options vest over three years of continued service, with 33.333% of the shares vesting after one year and 2.778% of the shares vesting each month thereafter so long as the executive officer continues to work at Intuit.
Dividends
Intuit employees (including the Named Executive Officers) are provided dividend equivalent rights in conjunction with RSU awards, but the dividends are not paid until the shares vest. For Relative TSR RSUs, dividends are paid based on the actual units that vest following measurement of performance and satisfaction of the three-year vesting requirement, and are subject to the same provisions as the underlying awards. Dividend equivalent rights on RSUs (including Relative TSR RSUs) that fail to vest are forfeited.

52


Determination of Equity Grant Value  
The Compensation Committee considers multiple factors in determining the size of an executive’s equity awards, including but not limited to annual performance ratings, retention value of current equity holdings and competitive equity award values among peer companies for roles of similar size and scope. In order to be eligible to receive equity awards, an executive must have a performance rating of “strong” or “outstanding,” and a rating of “outstanding” will, for any given role, generally result in a larger equity grant than for any other rating. In setting specific awards for our Named Executive Officers, the Committee exercises its judgment and discretion. All annual equity granted to our Named Executive Officers reflects the portfolio mix of 50% Relative TSR RSUs, 25% time-based RSUs and 25% stock options discussed above.
The value of the equity granted to Mr. Smith was determined based on a review by the Compensation Committee of data provided by FW Cook, in addition to the Compensation Committee’s own subjective assessment of Mr. Smith’s performance. To determine the size of the equity awards for Messrs. Williams, Goodarzi, Stansbury and Wernikoff, the Compensation Committee used data provided by FW Cook, which estimated the range of grant values provided to executives in comparable positions at companies within Intuit’s compensation peer group, as discussed below. The Compensation Committee then considered the Chief Executive Officer’s recommendations in order to determine where within the applicable range each executive’s equity grant value would fall. The Compensation Committee gives considerable weight to the recommendations provided by the Chief Executive Officer because of his direct knowledge of each other Named Executive Officer’s performance and contribution.
The realization of the executives’ grant date values is subject to a significant amount of performance risk, and the amount actually earned over the next several years could be significantly lower if Intuit’s absolute and relative TSR (compared against the TSR Peer Group) is not strong. The challenging nature of Intuit’s performance-based equity goals is illustrated by the 60th percentile TSR target and the failure to earn full payouts of performance cash and equity awards despite continued, long-term positive TSR growth over the last five fiscal years.
The fiscal 2016 equity decisions for each of our Named Executive Officers are described under “Fiscal 2016 Named Executive Officer Compensation Decisions” below.
Fiscal 2016 Named Executive Officer Compensation Decisions
Brad Smith
In assessing Mr. Smith’s performance and resulting compensation decisions, the Compensation Committee considered his impact on the Company’s one-year operating plan and longer-term strategic plans.
The Compensation Committee determined that Mr. Smith had delivered outstanding performance with respect to both his short and long-term goals. In particular, they determined it was appropriate to award his outstanding performance with respect to the following annual operating goals which were established by the Compensation Committee early in fiscal 2016:
Revenue growth
Non-GAAP operating income growth
Leadership results
Build a high performing organization and a great environment for top talent to work:
Maintain high employee engagement (annual survey and related actions) in a highly competitive talent market (minimize regrettable losses of key talent)
Maintain rigorous talent management efforts (hiring, retention and development - with a specific focus on attracting/retaining top product and technical talent)
Enhance the product and engineering culture by engaging and empowering product, design and technical talent to develop and deliver great products and network effect platforms
Develop a collaborative work environment which empowers individuals at all levels to contribute and execute effectively in an ecosystem environment    
Deliver awesome customer experiences that create delight and grow market share:
Uphold the highest customer experience as measured by improvements in customer benefit metrics and net promoter scores, including transforming our approach to customer care
Cultivate an innovative culture where teams apply rapid experimentation to improve existing and/or build new products that are valued by customers

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Build durable advantage in Intuit’s technology and infrastructure that empowers local teams to innovate quickly, increasing effectiveness and efficiency (strategic capabilities and services)
Develop a systemic process for identifying and capitalizing on inorganic opportunities to strengthen Intuit’s talent, technology and revenue trajectory
In assessing Mr. Smith’s performance against his one-year goals, the Compensation Committee noted that the Company exceeded its plan with respect to revenue, deferred revenue, operating income and EPS growth, as well as improved net promoter scores in each of the Company’s core products. It further noted that the Company’s revenue growth was above the peer median and its non-GAAP operating income growth was near the 75th percentile of the peer group.
The Compensation Committee also determined that Mr. Smith delivered outstanding progress toward the following longer-term goals established by the Compensation Committee early in fiscal 2016:
Long-term strategic plan for Intuit that accelerates our growth track
Our durable mission: improve our customers’ financial lives so profoundly, they can’t imagine going back to the old way
Demonstrate progress against: (1) being the operating system behind small business success and (2) doing the nations’ taxes by:
1.
Delivering awesome product experiences:
a.
Amazing first use experiences that deliver the customer benefit much better than competitors
b.
Reimagined mobile first/mobile only, capitalizing on the unique mobile design and capabilities
2.
Enabling the contributions of others to build network effect platforms
a.
Solving multi-sided problems well, creating a virtuous circle of end users and contributors
b.
Expanding globally through platforms that are localized by users and developers
3.
Using data to create delight
a.
Enabling customer data to deliver better product experiences and breakthrough benefits
Multi-year leadership strategy and progress
Management growth and succession plans; strong business leaders and pipeline; hiring and retention of key technical talent
Positive trend for employee engagement results (annual survey and related actions); addressing any specific issues which arise (minimizing regrettable losses of key talent)
Positive trend for customer experience results as measured by sustained improvement in customer benefit metrics and net promoter scores
Progress against global expansion strategies
In assessing Mr. Smith’s performance and progress toward these long-term goals, the Compensation Committee determined that under Mr. Smith’s leadership, Intuit has made significant progress toward its long-term strategic goals of being the operating system behind small business success and doing the nations’ taxes, as evidenced by the Company’s growth in QuickBooks Online subscribers to over 1.5 million at the end of the 2016 fiscal year, and our share gains in the do-it-yourself software market over the past three tax seasons. In addition, the Committee noted the improved conversion, attach rate and net promoter score, or NPS, with respect to the Company’s mobile offerings, as well as the Company’s success using data to power advances in both TurboTax and the Small Business Group. It also recognized Mr. Smith’s achievements with respect to growing and developing the Company’s management team and technical talent, as well as accelerating its global growth, all while continuing to maintain best-in-class employee engagement scores and high customer satisfaction scores in several key businesses. The Committee also noted that the Company’s TSR was at approximately the 70th percentile of the Company’s peer group for the past three years, and the 66th percentile for the past five years.
The Committee consulted with the Board without Mr. Smith present and made the following decisions with respect to his compensation:

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Base salary. The Compensation Committee concluded that Mr. Smith’s base salary was competitive with the Company’s peers and determined to maintain the base salary of Mr. Smith at the fiscal 2016 level for fiscal 2017.

Cash Bonus. The Committee concluded that Mr. Smith’s bonus would be paid at 155% of target, which was a 30% increase for individual performance over the 119.4% baseline funding achieved for exceeding corporate goals. In making this determination, no individual factor was assigned any specific weight by the Compensation Committee. Rather, the Compensation Committee considered the strong aggregate performance of all of these factors, assessed their overall impact on the Company and exercised its judgment in setting his bonus. The Committee also determined that Mr. Smith’s fiscal 2017 target bonus should be increased to 175% of salary, making an increased portion of his total cash compensation performance-based, and resulting in target fiscal 2017 cash compensation between the median and 75th percentile of the Company’s compensation peers.
Equity. The equity granted to Mr. Smith at the end of fiscal 2016 has a target value of $16,500,000. In determining his awards, the Compensation Committee reviewed data provided by FW Cook, in addition to the Compensation Committee’s own subjective assessment of Mr. Smith’s outstanding performance as well as strong Company performance overall and relative to Intuit’s peers. The Compensation Committee also maintained the one-year mandatory holding period for Mr. Smith’s service-based RSUs and his Relative TSR RSUs. Mr. Smith is required to hold the service-based RSUs and Relative TSR RSUs for one year after they vest, and the shares can only be released early in the event of death, disability or a change in control of the ownership of the Company. The purpose of this holding period is to ensure longer-term alignment with stockholders. The target number shares subject to each of Mr. Smith’s Relative TSR RSUs, service-based RSUs and Stock Options is set forth below under “Fiscal 2016 Equity Grants.”
Other Named Executive Officers
The Compensation Committee determined the compensation for Intuit’s other Named Executive Officers based on each executive’s leadership and progress toward the Company’s one-year operating plan and longer-term strategic plans. In evaluating these executives and determining each of their overall performance ratings, the Compensation Committee considered: (1) the performance evaluation and pay recommendations made by the Chief Executive Officer, which took into account the performance of each executive’s business unit or functional group, the executive’s leadership capability and importance of retention, and (2) the scope, degree of difficulty and importance of the executive’s responsibilities. The Compensation Committee gives considerable weight to the evaluation provided by the Chief Executive Officer because of his direct detailed knowledge of each other Named Executive Officer’s performance and contribution. In determining the individual bonus payouts, no individual factor was assigned any specific weight by the Compensation Committee. Rather, the Compensation Committee assessed these factors and their overall impact on the Company and exercised its judgment in determining each executive’s fiscal 2017 base salary and fiscal 2016 cash bonus and equity awards.
Neil Williams.  The Compensation Committee determined that Mr. Williams had outstanding performance for fiscal 2016. Under his leadership, Intuit’s finance team has continued to build strong partnerships with the Company’s business units and external stakeholders to achieve excellent results. The Committee also recognized his leadership of the Company’s corporate strategy and development team, which drove the Company’s divestitures of the Demandforce, Quicken and QuickBase businesses, as well as his leadership of the Company’s expense-management effort. In recognition of the foregoing, the Compensation Committee approved an increase in Mr. Williams’ base salary by 3.4% to $750,000, a bonus award at 138% of target, which reflected an individual upward adjustment of 16% over the baseline bonus funded for operating performance versus Intuit’s annual goals, and equity grants with a value of $6,500,000.
Sasan Goodarzi. The Compensation Committee determined that Mr. Goodarzi had outstanding performance in his role as the head of Intuit’s Consumer Tax business and in his transition to lead Intuit’s Small Business Group, beginning May 1, 2016. Under his leadership, TurboTax Online units grew 15% and total TurboTax units grew 12%. Mr. Goodarzi also led the Consumer Tax team in its introduction of two dozen product innovations, helping to expand the do-it-yourself software category while increasing the Company’s share in the category as well. The Committee also recognized Mr. Goodarzi’s execution of a smooth transition of the leadership of the Consumer Tax team to Mr. Wernikoff, as well as the fresh perspective he is bringing to his new role leading the Small Business Group. In recognition of his significant accomplishments during fiscal 2016, the Compensation Committee approved an increase in Mr. Goodarzi’s base salary by 3.4% to $750,000, a bonus award at 155% of target, which reflected an individual upward adjustment of 30% over the baseline bonus funded for operating performance versus Intuit’s annual goals, and equity grants with a value of $8,500,000.
Tayloe Stansbury. The Compensation Committee determined that Mr. Stansbury had outstanding performance in his role as the Chief Technology Officer during fiscal 2016. Under his leadership, the Company has transitioned its technology platform to a platform based on service oriented architecture that allows data to be accessed quickly and effectively to delight customers. The Compensation Committee recognized Mr. Stansbury’s outstanding technical acumen as well as the expansion of the scope of his responsibilities to include leadership of the Company’s data services team. In recognition of Mr. Stansbury’s

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performance during the year, the Compensation Committee approved an increase in his base salary of 8.0% to $675,000, a bonus award at 140% of target, which reflected an individual upward adjustment of 17% over the baseline bonus funded for operating performance versus Intuit’s annual goals, and equity grants with a value of $6,000,000.
Daniel Wernikoff. The Compensation Committee determined that Mr. Wernikoff had outstanding performance in his role as the leader of the Small Business Group, and in his transition to lead Intuit’s Consumer Tax Group, beginning May 1, 2016. Under his leadership, the Small Business Group increased total QuickBooks Online subscribers by 41% for the year, reaching more than 1.5 million QuickBooks Online subscribers; grew online active payments customers 6% and grew online payroll customers by 17%. The Compensation Committee also recognized Mr. Wernikoff’s leadership in driving significant growth in QuickBooks Online international subscribers, as well as in QuickBooks Self Employed subscribers. The Compensation Committee approved an increase in Mr. Wernikoff’s base salary of 3.4% to $750,000, a bonus award at 138% of target, which reflected an individual upward adjustment of 16% over the baseline bonus funded for operating performance versus Intuit’s annual goals, and equity grants with a value of $8,500,000.
Fiscal 2016 Equity Grants
The following table sets forth the total annual equity grant value awarded to each Named Executive Officer at the end of fiscal 2016 and the service-based RSUs, stock options and target number of Relative TSR RSUs granted in connection with the fiscal 2016 performance and compensation review process.

 
 
 
 
Target # of RSUs
 
# of RSUs/Stock Options
 
 
 
 
Relative
 
 
 
 
 
 
 
 
TSR
 
 
 
 
 
 
Value-Based Equity
 
RSUs
 
RSUs
 
Stock Options
Name
 
Grant (1)
 
(50% of value)
 
(25% of value)
 
(25% of value)
Brad D. Smith
 
$
16,500,000

 
74,000

 
36,000

 
213,000

R. Neil Williams
 
$
6,500,000

 
29,289

 
14,356

 
84,153

Sasan K. Goodarzi
 
$
8,500,000

 
38,302

 
18,773

 
110,046

H. Tayloe Stansbury
 
$
6,000,000

 
27,036

 
13,252

 
77,679

Daniel A. Wernikoff
 
$
8,500,000

 
38,302

 
18,773

 
110,046

(1) These values were estimated using data available to the Compensation Committee on July 20, 2016. They do not match exactly the grant date fair values presented in the Summary Compensation Table, which were calculated in accordance with FASB ASC Topic 718 and take into account the price of Intuit’s common stock on the July 21, 2016 grant date.
Achievement of Performance Targets for July 2013 Performance-Based RSU Awards
In July 2013, the Compensation Committee approved the grant of performance-based RSUs to Company executives. Approximately half of the performance-based RSUs were tied to the achievement of Intuit’s three year operating goals (“2013 Operating Performance RSUs”) and half were tied to the relative total stockholder returns (“2013 Relative TSR RSUs”). In August 2016, the Compensation Committee certified the achievement of the operating performance goal RSUs at 42% of target and the achievement of the relative TSR performance RSUs at 126.8% of target. Both achievement levels were based on formulaic and non-discretionary achievement of the pre-established goals and objectives.
The operating goals reflect targeted compound annual growth rates in both revenue (50% of 2013 Operating Performance RSUs) and GAAP operating income (50% of 2013 Operating Performance RSUs) for the three-year period from August 1, 2013 through July 31, 2016. The earnout of the 2013 Operating Performance RSUs at only 42% of target during a time period when Intuit achieved compound annual revenue growth of 5.94% and had TSR above the 60th percentile demonstrates the aggressive performance goals established by the Compensation Committee. The table below sets out the metrics for the revenue growth and operating income growth goals as well as the actual results and payout levels for the 2013 Operating Performance RSUs:


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Measure
 
Revenue Growth (CAGR)
 
GAAP Operating Income Growth (CAGR)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighting
 
50%
+
50%
=
100%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FY14-FY16
 
 
 
 
 
Combined
 
 
FY14-FY16
 
Percent
 
Payout as
 
Operating
 
Percent
 
Payout as
 
Payout as
 
 
Revenue
 
of Target
 
a Percent
 
Income
 
of Target
 
a Percent
 
a Percent
 
 
Growth
 
Achieved
 
of Target
 
Growth
 
Achieved
 
of Target
 
of Target
Maximum
 
13.1%
 
120%
 
200%
 
15.5%
 
120%
 
200%
 
200%
 
 
12.5%
 
115%
 
175%
 
14.9%
 
115%
 
175%
 
175%
 
 
12.0%
 
110%
 
150%
 
14.2%
 
110%
 
150%
 
150%
 
 
11.4%
 
105%
 
125%
 
13.6%
 
105%
 
125%
 
125%
Target
 
10.9%
 
100%
 
100%
 
12.9%
 
100%
 
100%
 
100%
 
 
9.3%
 
85%
 
95%
 
11.0%
 
85%
 
95%
 
95%
 
 
7.6%
 
70%
 
90%
 
9.0%
 
70%
 
90%
 
90%
 
 
5.7%
 
53%
 
68%
 
6.8%
 
53%
 
68%
 
68%
 
 
3.8%
 
35%
 
45%
 
4.5%
 
35%
 
45%
 
45%
 
 
1.9%
 
18.0%
 
23%
 
2.3%
 
18%
 
23%
 
23%
Threshold
 
—%
 
—%
 
—%
 
—%
 
—%
 
—%
 
—%
Actual
 
5.9%
 
54.0%
 
70%
 
1.4%
 
11%
 
14%
 
42.0%