JCPenney 2003 Annual Report Download - page 48

J. C. Penney Company, Inc.46
CORPORATE CITIZENSHIP
Community Relations
The Company remains committed to investing in community
programs that are important to its customers and its employees.
JCPenney’s commitment focuses on three major endeavors. The
Company is a contributor to JCPenney Afterschool Fund, a char-
itable organization committed to providing children with high
quality after-school programs. The Company supports commu-
nity health and welfare issues primarily through support of local
United Ways nationwide. The Company annually recognizes its
associates’ personal volunteer endeavors through the James Cash
Penney Awards for Community Service. A more complete review
of JCPenney’s community relations efforts is available online at
www.jcpenney.net/company/commrel.
Diversity
JCPenney has been a corporate member of the National
Minority Supplier Development Council (NMSDC) since 1972
and continues to invest in the NMSDC’s Business Consortium
Fund, which makes loans to minority-owned businesses. The
Company is a founding member of the Women’s Business
Enterprise National Council. In 2003, the Company’s purchases
from minority-owned and women-owned businesses totaled
$397 million and $264 million, respectively.
Environmental Affairs
The Company’s commitment to doing business in a responsi-
ble manner includes a determination to make environmental,
health and safety considerations an important factor in corpo-
rate decision-making and policy. Copies of “Matters of Principle:
JCPenney and Environmental Responsibility” may be obtained as
indicated on the inside back cover of this Annual Report.
CORPORATE GOVERNANCE
The Company is aware that many of its stockholders are inter-
ested in matters of corporate governance. JCPenney shares this
interest and is, and for many years has been, committed to assur-
ing that the Company is managed in a way that is fair to all its
stockholders and that allows its stockholders to maximize the
value of their investment by participating in the present and
future growth of JCPenney. JCPenney has fully implemented the
corporate governance standards adopted by the Securities and
Exchange Commission and the New York Stock Exchange
(NYSE). The Corporate Governance Committee of the Board of
Directors reviews developments in the governance area as they
affect relations between the Company and its stockholders and
makes recommendations to the full Board regarding such issues.
A complete listing of the Company’s corporate governance
guidelines is available online at www.jcpenney.net.
Independent Board of Directors
In keeping with its long-standing practice, the Company’s
Board continues to be an independent board under any reason-
able definition, including that recently adopted by the NYSE.
Nominees for directors are selected by a committee composed
entirely of directors who are not Company employees. The wide
diversity of expertise, experience and achievements that the
directors possess in business, investments, large organizations
and public affairs allows the Board to most effectively represent
the interests of all the Company’s stockholders.
Independent Committees
The Audit Committee, Corporate Governance Committee,
Finance Committee and Human Resources and Compensation
Committee, all standing committees of the Board of Directors,
are composed entirely of independent directors. These commit-
tees, as well as the entire Board, consult with and are advised
by outside consultants and experts in connection with their
deliberations, as needed. Copies of the charters of each of
these committees are available online at www.jcpenney.net.
Executive Compensation
A significant portion of the cash compensation received by
the Company’s executive officers consists of performance incen-
tive compensation payments derived from compensation plan
"values." The amounts of these plan values are directly related to
the sales and earnings of the Company and, consequently, vary
from year to year based upon Company performance. The total
compensation package for the Company’s executive officers is set
by the Human Resources and Compensation Committee, which
is composed entirely of independent directors and which receives
the advice of independent outside consultants. Please refer to the
Company’s 2004 Proxy Statement for a report from the
Company’s Human Resources and Compensation Committee
describing how compensation determinations are made.
Confidential Voting
The Company has a long-standing confidential voting policy.
Under this policy, all proxy (voting instruction) cards, ballots and
vote tabulations, including telephone and Internet voting
records, that identify the particular vote of a stockholder are kept
secret from the Company, its directors, officers and employees.
Proxies are returned directly to the tabulator, who receives and
tabulates the proxies. The final tabulation is inspected by inspec-
tors of election who are independent of the Company, its direc-
tors, officers and employees. The identity and vote of a stock-
holder is not disclosed to the Company, its directors, officers or
employees, or any third party except: (1) to allow the independ-
ent election inspectors to certify the results of the vote; (2) as
necessary to meet applicable legal requirements and to assert or
defend claims for or against the Company; (3) in the event of a
proxy solicitation based on an opposition proxy statement filed,
or required to be filed, with the Securities and Exchange
Commission; or (4) in the event a stockholder has made a writ-
ten comment on such material.