GNC 2009 Annual Report Download - page 134

Table of Contents
Our compensation program is designed to reward the Named Executive Officers for their individual contributions, incentivize them for future
performance and recognize our positive growth and financial performance. The Compensation Committee considers numerous factors,
including the Named Executive Officers' experience in conjunction with the level and complexity of the position in setting executive
compensation. Regarding the compensation program and structure generally and all aspects of executive compensation, our management,
principally our Chief Executive Officer, provides recommendations to the Compensation Committee; however, the Compensation Committee
does not delegate any of its functions to others in setting compensation. Our Chief Executive Officer does not provide recommendations with
respect to his own compensation. We do not generally engage any consultants related to executive or director compensation matters; however,
in December 2008 our Compensation Committee reviewed a comparative analysis of our top nine executives' total compensation packages
prepared by the Hay Consulting Group to determine whether the compensation packages of our top nine executives are at market levels.
Although our Compensation Committee reviewed this report, which generally indicated that our top nine executives receive market
compensation, the Committee did not rely on this report in determining the current or future compensation of our named executive officers. Our
Committee does, however, regularly refer to survey and other compensation data, as described more fully below.
Elements of the Company's Executive Compensation
Annual compensation for our Named Executive Officers is provided under employment agreements. We have employment agreements with
all of our Named Executive Officers with the exception of Mr. Fox.
Generally, annual compensation for our Named Executive Officers consists of the following components:
• Base salary. The Compensation Committee uses base salary to attract and retain a strong motivated leadership team at levels that are
commensurate with other specialty retailers of comparable size to us.
• Annual incentive compensation. Annual incentive compensation is used to reward our Named Executive Officers for our growth and
financial performance based on achievement of criteria approved by the Compensation Committee. Our Compensation Committee
receives input from our Human Resources Department and Chief Executive Officer about our Named Executive Officers' performance
and business goals and objectives, and considers prevailing market practices based on, among other things, survey comparisons from
Mercer Human Resource Consulting LLC, Western Management Group, and Watson Wyatt Worldwide to determine the compensation
and criteria for particular positions and seniority levels. As additional cash compensation that is contingent on our annual financial
performance, it augments the base salary component while being tied directly to financial performance. Annual incentive compensation
is documented in an annual plan, which is adopted by the Compensation Committee prior to or during the beginning of the applicable
year.
• Stock options. Stock options, which are discussed in more detail under "—Stock Awards," are granted to recognize and incentivize
performance. Stock options provide a non-cash compensation component to drive performance, but with a long-term horizon, since
value to the Named Executive Officer is dependent on continued employment and appreciation in our overall value.
• Benefits and perquisites. Our Named Executive Officers participate in employee benefits generally available to all employees, as well
as any benefits generally made available to our executive officers. In addition, the Named Executive Officers receive certain
perquisites, which are primarily based on level of position. Such perquisites may include insurance and parking, or additional cash
compensation to meet specific goals, such as car allowance and professional assistance. We believe such perquisites are a necessary
component for a competitive compensation package. In addition, we maintain a non-qualified deferred compensation plan in which
certain of our Named Executive Officers are eligible to participate.
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