Kodak 2006 Annual Report Download - page 165

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10
formance in light of those goals and objectives and to determine and approve the CEO’s compensation level based on this evaluation. The proposal’s
arbitrary cap would hinder the Compensation Committee’s ability to fulfi ll its duties.
Contrary to Company’s Executive Compensation Principles. Our Executive Compensation Principles link closely the compensation of our senior
offi cers with the achievement of annual and long-term performance goals. By imposing an arbitrary constraint on the compensation of our senior
leadership, the proposal would undermine the performance-based nature of our executive compensation program and would limit the Compensation
Committee’s ability to design effective performance goals to retain and incent our senior leadership.
Proposal is Ambiguous and Unworkable. The proposal has fundamental fl aws that make it unworkable. The proposal seeks to require that the
Company limit all annual “remuneration” to $500,000 per year but fails to adequately defi ne the critical term “remuneration” or to specify how remu-
neration is to be valued. Likewise, the proposal provides no guidance as to how and when certain forms of non-salary compensation, such as stock
options and restricted stock units, are to be valued for purposes of the $500,000 annual limit on remuneration. Furthermore, the proposal provides
insuffi cient guidance regarding the individuals to whom it is intended to apply. The proposal indicates that it applies to “the top fi ve persons named
in Management” but it “does not affect any other personnel of the company.” The proposal, however, does not provide any instruction as to how the
Company is to determine who is a “top fi ve person named in Management.”
For the reasons described above, the Board of Directors recommends a vote AGAINST this proposal.