GNC 2010 Annual Report Download - page 143

Table of Contents
How We Chose Amounts and/or Formulas for Each Element
Base Salary. The Compensation Committee intends to set the base salary for our Named Executive Officers at a level to attract and
retain a strong motivated leadership team, but not so high that it creates a negative perception with our employees generally, noteholders or
stockholders. Each Named Executive Officer's current and prior compensation is considered in setting future compensation. In addition, we
review the compensation practices of other companies. Base salary amounts are determined by complexity and level of position as well as
market comparisons.
Each year, we perform a market analysis with respect to the compensation of all of our Named Executive Officers. Although we do not
use compensation consultants, we participate in various surveys and use the survey data for market comparisons. Currently, we use surveys
with both base salary and other short-term compensation data, including incentive compensation and fringe benefits, that are available from
Mercer Human Resource Consulting LLC, Western Management Group, and Watson Wyatt Worldwide in the specialty retail and non-durable
manufacturing categories. In addition to focusing our analysis on the specific executive positions, we break down the survey information based
on corporate and/or average store revenue and geographic location of comparable companies to ensure that we are using valid comparisons.
We also use internal value comparisons; however, we do not have any specific point system or rating structure for internal values.
We have not historically used, and do not intend to use, the information in the surveys for benchmarking purposes or in our process for
setting compensation. Rather, the Compensation Committee sets compensation levels and then uses the information in the surveys to confirm
and demonstrate to management that the compensation being paid by us is consistent with market levels.
Effective January 1, 2010, the Compensation Committee granted merit-based increases to the annual base salaries of Mr. Fortunato and
Ms. Kaplan, and effective December 6, 2009, the Compensation Committee granted merit-based increases to the annual base salaries of
Messrs. Nuzzo and Dowd. The annual base salaries of Mr. Fortunato, Ms. Kaplan and Messrs. Nuzzo and Dowd were increased to $886,000,
$716,000, $409,400 and $350,000, respectively. The increases ranged from 2% to 6.2% as a percentage of previous salary levels and were
based upon the Named Executive Officers' performance for the year ended December 31, 2009. In addition, effective October 29, 2009, the
Compensation Committee granted Mr. Stubenhofer a merit-based increase in his annual base salary to $320,000.
Annual Incentive Compensation. Our Named Executive Officers are entitled to annual performance bonuses pursuant to the terms of
their employment agreements. The annual performance bonus for each Named Executive Officer has target and maximum bonus amounts
expressed as a percentage of his or her annual base salary. The respective percentages are determined by position and level of responsibility
and are stated in the annual incentive plan adopted by the Compensation Committee. The employment agreements of our Chief Executive
Officer and President provide that their targets will not be less than 75% of their respective base salaries with a maximum of 125% of their
respective base salaries. The target and/or maximum amounts may be increased for any Named Executive Officer by the terms of an
employment agreement entered into after the adoption of an annual incentive plan.
The following table sets forth the target and maximum bonus amounts for each level of executive officer with respect to the 2009
incentive plan adopted in February 2009 (the "2009 Incentive Plan"), the 2008 incentive plan adopted in February 2008 (the "2008 Incentive
Plan") and the 2007 incentive plan adopted in June 2007 (which replaced and superseded the 2007 incentive plan adopted in December 2006)
(the "2007 Incentive Plan"): 137