Best Buy 2010 Annual Report Download - page 36

Prior to entering into his employment arrangement in higher percentage of total cash compensation for higher
June 2009, Mr. Anderson’s annual salary remained ranking positions be linked to our performance. In
unchanged at $1,265,000 from fiscal 2009 for the first addition, we considered the value of total cash
four months of fiscal 2010. The employment compensation in light of the external factors described in
arrangement for Mr. Anderson is discussed as part of Base Salary, beginning on page 33, to ensure that we
Director Compensation on page 60 and as part of remain competitive in the market for executive talent.
Special Circumstances, beginning on page 40. The For fiscal 2010, our Executive Officer STIP was
fiscal 2010 base salaries for Messrs. Pershing and structured to support our fiscal 2010 business priorities:
Willett remained unchanged from fiscal 2009 at (i) increasing domestic market share, (ii) efficient and
$414,000 and $850,000, respectively. effective enterprise, (iii) connected world, and
Short-Term Incentive. For fiscal 2010, the named (iv) international growth. As a result, we measured our
executive officers, except for Mr. Wheway, were eligible short-term incentive awards for our eligible named
for performance-based, short-term incentive awards executive officers on the following weighted performance
pursuant to our Executive Officer STIP. From May 2009, metrics:
through July 2009, Mr. Wheway was eligible for the • Operating income (40%);
International Leadership STIP. Beginning in August 2009,
• Selling, general and administrative expenses
Mr. Wheway was eligible for a performance-based,
(‘‘SG&A’’) (30%); and
short-term incentive award tailored to provide a
balanced score card between Best Buy brand operations • Domestic market share (30%).
in Europe and CPW brand/operations in Europe.
The Compensation Committee established the target
Mr. Wheway’s fiscal 2010 short-term incentive award is
performance metrics for fiscal 2010 based on our
described in Special Circumstances, beginning on
historical performance and target setting practices, as
page 40. Fiscal 2010 Executive Officer STIP payments
well as investor and market expectations.
were made in two installments, at the mid-point and
end of the fiscal year. Under the fiscal 2010 Executive Officer STIP design, we
measured the actual performance of each metric
Fiscal 2010 Executive Officer STIP awards were payable
independently against targets, with achievement of one
in cash and were expressed as a target payout
or all metrics to be additive to the individual’s total
percentage of each eligible named executive officer’s
short-term incentive award. Due to the uncertain
base salary. The target payout percentages for each of
economic challenges present at the beginning of fiscal
our eligible named executive officers fell within a range
2010, the Compensation Committee elected to create a
of 65% to 200%. The target payout percentage for each
program with risk mitigating features, namely SG&A and
eligible named executive officer was set within this range
domestic market share, thereby giving us the opportunity
based on the application of our Executive
to be in the strongest possible position to take
Compensation Framework, with particular emphasis
advantage of economic recovery long term, but not at
placed on the internal job ranking of each position and
the expense of operating income.
taking into consideration external market data factors for
equivalent roles. We believe that it is important that a
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