CompUSA 2010 Annual Report Download - page 38

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•
Financial Goals (80% of total cash bonus target)
– Adjusted Operating Income Growth (60%); the Compensation Committee believes this is the most
important individual component and aligns the interests of our executives with those of our
stockholders, in addition to building long term value. Adjusted Operating Income is defined as
operating income adjusted for unusual or nonrecurri
ng items as determined by our Compensation
Committee.
– Sales Growth (20%); the Compensation Committee believes topline sales growth is key to our
Company achieving the scale necessary to remain competitive with larger companies.
Sales are
defined as sales revenue net of returns on a constant currency basis.
• Non-Financial Goals for 2010 (20% of total cash bonus target)
– Strategic Accomplishments (seven specific goals weighted at an aggregated 70% of the total non-
financial goal): These goals
relate to various strategic initiatives relating to enhancing our
management and business information systems, and implementing distribution/warehouse system
improvements.
The Compensation Committee believes these initiatives will enhance the
Company’ s operational infrastructure and efficiency.
– Corporate Governance Goals for 2010 (three specific goals weighted at 30% of the total non-
financial goal):
These goals relate to continuing improvements in our internal processes and
procedures that the Compensation Committee believes will generally benefit stockholders.
Achievement of each of the target financial goals generates a variable target bonus payment (base case);
reduced bonuses are payable on a pro rata basis for each financial goal component, starting at achievement of in
excess of 80% of the target financial goal component amount up to 140% of the target financial goal component
amount. Each 1% variance in actual achievement from the 100% level generates a 5% variance in the target bonus
amount for that component, and no bonus is payable in respect of these components if achievement is 80% or less of
the target financial component goal amount. Increased bonuses (up to 300% of the target bonus amount for each
component) are payable on a pro rata basis for each financial goal component amount achieved. The non-financial
goals are measured based on whether or not the goal is either accomplished or not accomplished during the fiscal
year.
Under the 2011 Bonus Plan, the Compensation Committee set the following cash bonus target amounts for
each of our named executive officers, assuming achievement of the 2011 financial and non-financial goals at 100%
base case target levels:
Richard Leeds
$1,100,000
Bruce Leeds
$ 750,000
Robert Leeds
$ 750,000
Lawrence Reinhold
$ 825,000
Gilbert Fiorentino6
$1,950,000
The Compensation Committee believes these bonus levels are appropriate for each of our named executive
officers; these bonus levels are the same as those that were set for the named executive officers in 2010, and take
into account the 2011 base salary increases discussed below. The 2011 salary increases reflect the Compensation
Committee’ s view that such increases are appropriate in light of 2011 NEO bonuses being set at the same level as
2010 and 2010 NEO base salary having been held at the same level as 2009.
The 2011 Bonus Plan imposes a cap on the total bonus that could be payable to any executive at 300% of
6 Mr. Fiorentino has been placed on administrative leave from his position with the Company pending the outcome of the
meeting. See “Employment Arrangements of the Named Executive Officers- Gilbert Fiorentino” at page 33 and “Potential
Payments Upon Termination or Change of Control- Gilbert Fiorentino” at page 40 for additional information.