Abercrombie & Fitch 2012 Annual Report Download - page 52

Table of Contents
Merit Increases for NEOs other than Mr. Jeffries
In Fiscal 2011, the Company established an aggregate base salary increase budget of 3%. In doing so, the Company reviewed market data on projected
base salary increases published by numerous sources including Hay Group and WorldatWork. The NEOs other than the CEO received the following base
salary increases during Fiscal 2011:
NEO
Base Salary
Prior to Increase
Base Salary
After Increase
%
Change
Effective
Date
Jonathan E. Ramsden $ 725,000 $ 750,000 3.5% March 27, 2011
Diane Chang $ 965,000 $ 980,000 1.6% March 27, 2011
Leslee K. Herro $ 965,000 $ 980,000 1.6% March 27, 2011
Ronald A. Robins Jr. $ 450,000 $ 462,500 2.8% March 27, 2011
The base salary increases for Mr. Ramsden, Ms. Chang, Ms. Herro and Mr. Robins were based upon a variety of factors, as discussed above, and were
primarily driven by each of their performance ratings and market comparisons.
Annual Incentive Compensation Plan
The Incentive Compensation Performance Plan (the "Incentive Plan"), approved by stockholders at the 2007 Annual Meeting of Stockholders (and to be
submitted to the stockholders for re-approval at the Annual Meeting), is designed to focus on and reward short-term operating performance. It is the broadest
of the Company's management incentive programs with eligibility approaching 900 participants, including the CEO and the other NEOs.
The Incentive Plan has target incentive levels, expressed as a percentage of base salary, for each level of eligible associate. Each participant in the
Incentive Plan is assigned to an incentive level based on his/her position within the Company, with more senior positions having more pay at risk. The annual
incentive level for each associate is determined in conjunction with the other principal elements of compensation (base salary and long-term incentives) by an
annual assessment of a number of factors, including the individual's current base salary, job responsibilities, impact on development and achievement of
business strategy, labor market compensation data, individual performance relative to job requirements, the Company's ability to attract and retain critical
executive officers and salaries paid for comparable positions within an identified compensation peer group. No specific goals or weighting is applied to the
factors considered in setting the incentive level for the NEOs, and thus the process relies on the subjective exercise of the Compensation Committee's
judgment.
Awards under the Incentive Plan vary based upon the performance of the Company relative to the goals set by the Compensation Committee at the
beginning of each season. The maximum incentive opportunity that can be earned under the Incentive Plan is two times the target award, for the achievement
of outstanding performance. For performance falling in between the "threshold," "target" and "maximum" performance levels, the Company awards incentive
payout amounts which are determined on an interpolated basis. For performance falling below the "threshold" performance level, no incentive payouts are
made.
NEO
Minimum
Annual
Incentive
as a % of
Base Salary
Payout at
Threshold
Performance
as a % of
Base Salary
Michael S.
Jeffries 0% 30.00%
Jonathan E.
Ramsden 0% 20.00%
Diane
Chang 0% 22.50%
Leslee K.
Herro 0% 22.50%
Ronald A.
Robins
Jr. 0% 11.25%
The Company's Incentive Plan is divided into two six-month periods that correspond to the Company's major seasons, February through July (the
"Spring" season) and August through January (the "Fall" season). Each participant's annual incentive opportunity is divided into two performance periods —
the target incentive payout for the Spring season equals 40% of the annual incentive target opportunity and the target incentive payout for the Fall season
equals 60% of the annual incentive target opportunity. The split in the annual incentive target opportunity is based on historical seasonality of operating
results going back several years.
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