GNC 2010 Annual Report Download - page 141

Table of Contents
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 Compensation Committee did not rely on this report or use it
for benchmarking purposes in determining the current or future compensation of our Named Executive Officers. Our Compensation 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.
Generally, annual compensation for our Named Executive Officers consists of the following components:
1. 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.
2. 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. However, these surveys are
not used to benchmark compensation. As additional cash compensation that is contingent on our annual financial performance,
annual incentive compensation 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.
3. 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.
4. 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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