CompUSA 2008 Annual Report Download - page 22

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13
KL2 2600873.8
receive an annual cash bonus, not to exceed 500% of their base salary, based on the Company’ s achievement of certain annual
performance-based goals.
The purpose of the Systemax Executive Incentive Plan is to promote the achievement of the Company’ s business objectives by
providing cash bonus awards to those executive officers who significantly impact the Company’ s performance towards those
objectives. Further, the Executive Incentive Plan enhances the Company’ s ability to attract, develop and motivate individuals as
members of a talented management team. As described herein, the cash bonus awards made under the Executive Incentive Plan may
recognize Company, business unit, team and/or individual performance. Currently, seven Company executives are eligible to
participate in the Executive Incentive Plan, including the named executive officers.
The Compensation Committee administers the plan, and may amend the plan. This committee is composed entirely of independent
directors of the Company, as defined under Section 162(m) of the Code.
Cash bonus awards made under the Systemax Executive Incentive Plan are subject to a participant achieving one or more
performance goals established by the Compensation Committee. The performance goals may be based on the overall performance of
the Company, and also may recognize business unit, team and/or individual performance. No payment will be made under the
Executive Incentive Plan unless the Compensation Committee determines that at least the minimum objective performance measures
have been met.
Performance goals are determined based primarily upon the three general business areas described above: Operational and
Financial Performance, Strategic Accomplishments, and Corporate Governance and Oversight.
In determining the compensation of a particular executive, consideration is given to the specific corporate responsibilities that
executive is charged with as they relate to the foregoing business areas. The Compensation Committee has the discretion to reduce the
amount payable to, or to determine that no amount will be paid to, a participant.
The amount of any cash bonus award varies based on the level of actual performance. The amount of any award for a given year is
determined for each participant by multiplying the individual participant’ s actual base salary in effect at the end of that year by a target
percentage (from 0% to 500%), related to the attainment of one or more performance goals, determined by the Compensation
Committee. The maximum amount payable under the Executive Incentive Plan to any participant for any fiscal year of the Company is
$5 million. In the event that an award contains more than one performance goal, participants in the plan will be entitled to receive the
portion of the target percentage allocated to the performance goal achieved. In the event that the Company does not achieve at least the
minimum performance goals established, no award payment will be made.
The actual amount of future payments under the Executive Incentive Plan will be based on the Company’ s future performance as it
relates to the three aforementioned general business areas, the applicable future performance goals for a particular executive and the
target percentages established by the Compensation Committee.
Role of the Compensation Committee and CEO in Compensation Decisions
The Compensation Committee’ s responsibility is to review and approve corporate goals relevant to the compensation of the Chief
Executive Officer and, after an evaluation of the Chief Executive Officer’ s performance in light of such goals, to set the compensation
of the Chief Executive Officer. The Compensation Committee also approves, upon the recommendation of the Chief Executive Officer
(following consultation with the Chief Financial Officer and Chief Executive of the Technology Products Group), (a) the annual
compensation of the other executive officers of the Company, (b) the annual compensation of certain subsidiary managers, and (c) all
individual stock incentive grants to other executive officers. The Committee is also responsible for reviewing and making periodic
recommendations to the Board with respect to the general compensation, benefits and perquisite policies and practices of the Company
including the Company’ s stock-incentive based compensation plans. The Compensation Committee has the authority to retain third
party compensation consultants to provide assistance with respect to compensation strategies, market practices, market research data
and the Company’ s compensation goals. The Compensation Committee retained a third party consultant in 2008 with respect to a long-
term incentive plan and is taking their suggestions under advisement.
Stock Option Grant Practices