GNC 2011 Annual Report Download - page 133

Table of Contents
Compensation Philosophy and Objectives
The primary objective of our compensation program is to attract and retain qualified employees who are enthusiastic about our mission and culture. A
further objective of our compensation program is to provide incentives and to reward each employee for his or her contribution to us. In addition, we strive to
promote an ownership mentality among our key leaders and directors. Finally, we intend for our compensation structure to be perceived as fair to our
employees, stockholders and holders of our debt. The foregoing objectives are applicable to the compensation of our Named Executive Officers.
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 when setting executive
compensation, including the Named Executive Officers' experience in conjunction with the level and complexity of their respective positions. Our
management, principally our Chief Executive Officer, provides recommendations to the Compensation Committee regarding the compensation program and
structure generally and all aspects of executive compensation; 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 were 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 surveys and other compensation data
relating to executive compensation, as described more fully below.
Elements of Our 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:
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. However, such 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
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