Dell 2006 Annual Report Download - page 131
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Table of Contents
The chart below is representative of the overall pay mix for our Named Executive Officers. The committee takes a holistic
approach to executive compensation and balances the individual compensation elements for each executive officer
individually. For example, because he is the company's largest stockholder, Mr. Dell does not receive any long-term
incentive compensation.
Pay Mix for Named Executive Officers
Pay Mix — Because executive officers are in a position to directly influence the overall performance of the company, and in
alignment with our highly-leveraged pay-for-performance philosophy, a significant portion of their compensation is delivered
in the form of performance-dependent, short- and long-term incentive programs. The level of performance-dependent pay
varies for each executive based on level of responsibility, market practices, and internal equity considerations, as well as
total share ownership.
Competitive Market Assessment — The Leadership Development and Compensation Committee annually reviews market
compensation levels for executive officers at similar high-tech and other large global general industry companies to
determine whether the compensation components for our executive officers remain in the targeted ranges described below
under "Market Positioning." With the assistance of the human resources department, management collects and presents to
the Leadership Development and Compensation Committee compensation data for the top five most highly-paid executive
officers from a list of targeted comparator companies as well as data for all executive officers from published compensation
surveys. These compensation surveys include data on high-tech and general industry pay practices for each executive
position at companies similar in size and complexity to Dell. The compensation assessment includes an evaluation of base
salary, target annual incentive opportunities, long-term incentive grant values, and benefits for each of our executive officers
relative to similar positions in the market.
Each year, management develops the peer group for evaluating pay for the executive officers (excluding, in Fiscal 2007,
Mr. Dell, who served as executive Chairman of the Board) based on those companies with which we compete for talent. The
committee reviews and approves the peer group annually using an assessment of sales volumes, market capitalization,
employment levels, product mix, and business
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