Kodak 2004 Annual Report Download - page 162
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E A S T M A N K OD A K C O M PA N Y
SHAREOWNERSHIPPROGRAM
TheinterestsoftheCompany’sexecutivesshouldbeinseparablefromthoseofitsshareholders.TheCompanyaimstolinktheseinterestsbyencouraging
stockownershiponthepartofitsexecutives.
OneprogramdesignedtomeetthisobjectiveistheCompany’sshareownershipprogram.Allexecutiveofficersarerequiredtoretainaspecifiedpercent-
ageofthesharesattributabletostockoptionexercisesorthevestingorearn-outoffullvaluesharesuntiltheyattaintheirownershiprequirements,which
areexpressedbelowasamultipleofbasesalary.
Theshareownershiprequirementsoperateasfollows:
Level SalaryMultiple RetentionRatio
CEO 5x 100%
COO/President 4x 100%
ExecutiveVPs 3x 75%
SeniorVPs 2x 75%
OtherExecutiveOfficers 1x 50%
CHIEFEXECUTIVEOFFICERCOMPENSATION
TheCommitteedeterminedthatMr.Carp’scompensationfor2004wasinlinewiththeexecutivecompensationphilosophyandpracticesdescribedabove
inthisReport.Mr.Carp’scompensationfor2004isdescribedbelow.
BaseSalary
In2004,theCommitteechosetomaintainMr.Carp’sannualbasesalaryat$1,100,000.Similarly,for2005,theCommitteechoseonceagaintomaintain
Mr.Carp’sannualbasesalaryat$1,100,000.TopreservetheCompany’sdeductibilityofallofMr.Carp’sbasesalaryforU.S.incometaxpurposes,pay-
mentof$100,000ofhisbasesalarywillnotbemadeuntilafterhisretirementfromtheCompany.
Short-TermVariablePay
Mr.Carp’sshort-termvariablepay,likethatofalltheCompany’sotherexecutives,ispayablebaseduponthesuccessfulattainmentofspecificfinancial
goalsestablishedbytheCommitteeinFebruaryofeachyearundertheCompany’sshort-termvariablepayplan,EXCEL.Asdescribedearlier,for2004,
thesefinancialgoalswerebasedonrevenueandinvestablecashflow.Aspreviouslyreportedunderthe2004EXCELperformancematrix,theCompany
exceededitstargetrevenueandinvestablecashflowgoalsfortheyear.TheCommitteealsoconsideredMr.Carp’sperformanceagainsthiskeyEXCEL
performancegoals.Inparticular,theCommitteenotedthattheCompanyiswellunderwayintheexecutionofitsdigitaltransformationstrategyandwith
regardtoitsleadershipanddiversitystrategies.Basedontheseresultsandtheresultsunderthe2004EXCELbaselinemetricsandrestructuringefforts
notedearlierinthisReport,theCommitteefixedMr.Carp’s2004EXCELawardat127%,whichisthesamelevelitestablishedforthecorporatefunding
pool.TheamountoftheawardislistedintheSummaryCompensationTableonpage34.
StockOptions
EffectiveDecember10,2004,theCommitteegrantedastockoptionawardtoMr.Carpof108,000shares.Theseoptionsweregrantedunderthesame
termsandconditionsasawardsmadetoallofficersgenerallyundertheCompany’sstockoptionprogram.Thatis,theoptionswerepricedat100%of
thefairmarketvalueoftheCompany’scommonstockonthedayofgrant,haveatermofsevenyearsandvestratablyoverthreeyears.TheCommittee
determinedMr.Carp’sawardbasedonitsreviewofbenchmarkdataandassessmentofMr.Carp’sleadership.
LeadershipStockProgram
TheCommitteeallocatedtoMr.Carpatargetawardforthe2004-2005performancecycleoftheLeadershipStockProgramof60,000performancestock
units.TheCommitteedeterminedMr.Carp’sallocationbasedonitsassessmentofhisleadershipandexecution.Aspartofitsdetermination,theCommit-
teealsotookintoaccountthefactthattherewouldbenoincreasetoMr.Carp’sannualbasesalaryfor2004.
PerformanceStockProgram
BasedontheCompany’sfinancialperformanceoverthethree-yearperiodendingin2004,Mr.Carpdidnotreceiveanawardforthe2002-2004perfor-
mancecycleofthePerformanceStockProgram,otherthantheawardearnedunderthecycle’sExecutiveIncentiveProgram,whichwasreportedinlast
year’sProxyStatementandisreferencedinfootnote(f)totheSummaryCompensationTableonpage34.