April 08, 2009, 10:19 PM — Nvidia on Wednesday revised its compensation plan for the current fiscal year, saying it was canceling performance-related compensation for most top executives in an effort to cut costs.
The company has canceled bonuses related to company or individual performance as they would not be appropriate "in light of the current economic environment and our cost-reduction efforts," Nvidia said in a filing with the U.S. Securities and Exchange Commission. The company's 2010 fiscal year will end Jan. 31, 2010.
Nvidia previously offered cash compensation to certain officers, directors and managers based on individual and corporate targets, according to the SEC filing. Executives not eligible for performance-related payoffs this fiscal year include Nvidia CEO Jen-Hsun Huang.
The revised compensation plan does not apply to Chief Financial Officer David White, who was hired in February. Nvidia also could change plans in the future and pay bonuses to other executives, the company said in the filing.
Huang in the past has said the company is taking steps to cut costs and conserve cash, though plans haven't been explicitly detailed.
Nvidia is chasing new revenue streams with new products in the face of the recession and increased competition from rivals Intel and Advanced Micro Devices. Late on Tuesday, Acer announced its new AspireRevo nettop, a small desktop PC that is the first desktop based on Nvidia's Ion platform. Ion couples the Nvidia GeForce graphics card with Intel's Atom CPU. Nvidia is also looking to enter the cell phone market later this year with its Tegra processors.
The company reported revenue of US$481.1 million during the fourth quarter of fiscal 2009, a 60 percent drop from its $1.2 billion revenue for the fourth quarter of 2008. The company also recorded a net loss of $147.7 million during the quarter, which ended on Jan. 25, compared with a net profit of $257 million in the first quarter of 2008.