CompUSA 2010 Annual Report Download - page 30

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• Strategic Accomplishments (including growth in the business, implementation of systems, process and
technology improvements, and growth in the value of the Company’ s assets, including through
strategic acquisition transactions); and
• Corporate Governance and Oversight (encompassing legal and regulatory compliance
and adherence to
Company policies including the timely filing of periodic reports with the SEC, the Sarbanes-
Oxley
Act, environmental, employment and safety laws and regulations and the Company’ s corporate ethics
policy).
Pursuant to SEC rules, the Company is not disclosing the specific performance targets and actual
performance measures for the goals used in its 2010 Bonus Plan and 2011 Bonus Plan because they represent
confidential financial information that the Company does not disclose to the public, and the Company believes that
disclosure of this information would cause us competitive harm. The Company believes that these performance
goals were reasonably challenging to achieve. Targets are set such that only exceptional performance will result in
payouts above the target incentive and poor performance will result in no incentive payment. We set the target
performance goals at a level for which there is a reasonable chance of achievement based upon forecasted
performance. Scenarios were developed based upon a range of assumptions used to build our annual budget. We
did not perform specific analysis on the probability of the achievement of the target performance goals given that the
market is difficult to predict. Rather, we relied upon our experience in setting the goals guided by our objective of
setting a reasonably attainable and motivationally meaningful goal.
In determining the compensation of a particular executive, consideration is given to the specific corporate
responsibilities that such executive is charged with as they relate to the foregoing business areas.
Historically, different approaches were used to pay cash bonus compensation, as described below. In 2009,
the Company moved towards a more uniform and target driven incentive compensation structure for its executives;
see the discussion below of our 2009 NEO Cash Bonus Plan, our 2010 NEO Cash Bonus Plan and our 2011 NEO
Cash Bonus Plan.
Stock-Based Incentives - Stock-based incentives, at the present time consisting of (a) stock options granted
at 100% of the stock’ s fair market value on the grant date (based on the NYSE closing price of the Company’ s
common stock on that date) and/or (b) restricted stock units granted subject to certain conditions, constitute the
long-term portion of the Company’ s executive compensation package. Stock based compensation provides an
incentive for executives to manage the Company with a view to achieving results which would increase the
Company’ s stock price over the long term and, therefore, the return to the Company’ s stockholders. Stock option,
restricted stock and restricted stock unit grants must be approved by the Compensation Committee; however, the
Compensation Committee is permitted to delegate this authority to officers of the Company regarding awards to
employees who are not officers or directors of the Company and who are not, and are not expected to become,
“covered employees” under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). We
do not use any specific allocation percentage or formula in determining the size of the cash and equity based
components of compensation in relation to each other.
The Compensation Committee is cognizant of the timing of the grant of stock based compensation in
relation to the publication of Company earnings releases and other public announcements. Stock based
compensation grants will not be made, generally, until after the Company has disclosed, and the market has had an
opportunity to react to, material, potentially market-moving, information concerning the Company.
Richard Leeds, Bruce Leeds and Robert Leeds have not historically received stock options or other stock-
based incentives as part of their compensation since the Company’ s initial public offering, and did not receive any
such compensation in 2008, 2009 or 2010. As described below, Mr. Reinhold received stock options in 2009 and
restricted stock units in 2010. As described below, Gilbert Fiorentino has received stock-based compensation in the
past; however, he did not receive new equity compensation grants in 2008, 2009 or 2010.
Benefits, Perquisites and Other Compensation - The Company provides various employee benefit programs
to its employees, including NEO’ s. These benefits include medical, dental, life and disability insurance benefits and
our 401(k) plan, which includes Company contributions. The Company also provides Company-owned or leased