Objectives
The objectives of our executive compensation program are to:
| • | Provide a competitive compensation package that enables us to attract, motivate, and retain high-caliber talent; |
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| • | Provide a total compensation package, aligned with the nature and dynamics of our business, which focuses management on achieving our annual and long-term corporate objectives and strategies; |
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| • | Reward both individual and collective contributions to Dolby’s success consistent with our pay-for-performance orientation; and |
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42 | 2026 PROXY STATEMENT
| • | Emphasize long-term value creation and further align the interests of management and stockholders through the use of equity-based awards. |
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Consistent with these objectives, our pay positioning strategy emphasizes the total direct compensation opportunity provided to our executive officers and places less weight on the discrete positioning of individual compensation elements. In addition, when evaluating total direct compensation, the Committee considers, as a point of reference only, compensation trends reflected by the companies in our compensation peer group (as described above) and companies with which we compete for talent. Individual elements of compensation are designed to create incentives that are consistent with our business needs and strategic objectives.
Executive Compensation Policies
In discharging its responsibilities relating to executive compensation, the Committee, with the assistance of its compensation consultant, monitors trends and developments in compensation policies and practices and seeks to enhance the effectiveness of our executive compensation program on an ongoing basis. As a result, our executive compensation program includes:
| • | Pay-for-Performance. An effective pay-for-performance orientation, including an annual cash incentive compensation plan tied to financial performance, as well as the use of long-term incentive compensation that represents the largest portion of each executive officer’s total compensation package, consisting of performance stock unit awards, stock options, and restricted stock unit awards; |
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| • | No Golden Parachute Gross-ups. A practice of not providing “golden parachute” excise tax “gross-ups” for our executive officers; |
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| • | Double-Trigger, not Single-Trigger, Vesting. “Double-trigger” vesting acceleration arrangements in connection with a change in control of Dolby (that is, accelerated vesting that is triggered only upon certain specified terminations of employment following a change in control of Dolby, and not upon a change in control alone) for equity awards granted to our executive officers, which are generally consistent with the arrangements provided to our other employees as described in “—Severance and Change in Control Arrangements—General” below; |
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| • | Limited Perquisites. A practice of providing our executive officers with only limited perquisites or other personal benefits that are both customary in the industry in which we operate and in furtherance of accomplishing our business objectives; |
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| • | Compensation Survey Data. The use of compensation survey data, as well as publicly-available data about the compensation practices of our peers, to inform the design of our executive compensation program; |
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| • | Stock Ownership Guidelines. Stock ownership guidelines for our executive officers that require them to hold a minimum number of qualifying Dolby equity securities; |
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| • | Clawback Policy. A policy on recoupment of incentive compensation (“clawback”) that is applicable to our executive officers and provides for the recoupment of certain cash or equity-based incentive compensation payments or awards made or granted to an executive officer in the event we are required to prepare an Accounting Restatement (as defined in “—Policy on Recoupment of Incentive Compensation (“Clawback”)” below); |
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| • | No Short Selling, Pledging or Hedging. A general prohibition against short sales, pledging of stock, hedging of stock ownership positions and transactions involving derivative securities relating to shares of our Common Stock; and |
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| • | Annual Compensation Risk Assessment. An annual risk assessment with respect to our compensation programs, policies, and practices, including the programs and policies for non-executive officer employees, as described in “Executive Compensation Tables and Related Matters—Compensation Program Risk Assessment.” |
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