Kodak 2007 Annual Report Download - page 159

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Director Compensation
In early 2007, the Governance Committee began a review of the Board’s Director Compensation Program. The last time such a review was
initiated by the Governance Committee was in late 2003. To assist in this effort, the Governance Committee retained Pearl Meyer &
Partners to competitively assess the Board’s director compensation relative to market trends and comparable peer companies. The
process used by the Governance Committee to conduct this review, the comparable peer group used to complete the competitive review,
the independent compensation consultant’s findings, the Governance Committee’s recommendations, and the revisions approved by the
Board to the Director Compensation Program are described on pages 23-25 of this Proxy Statement.
Board Mandatory Retirement Age
The Governance Committee continually seeks ways to improve the Board’s effectiveness. Last year, based on the Governance
Committee’s recommendation, the Board revised its mandatory retirement age. After reviewing the advantages and disadvantages of a
mandatory retirement policy, the prevalence of such a policy at large publicly held companies, the practices at peer companies and current
trends, the Governance Committee recommended that the Board’s mandatory retirement age be increased from age 70 to 72. The
Governance Committee also recommended that a waiver provision be implemented as part of the policy allowing the Board, upon
recommendation of the Governance Committee, to annually waive the age 72 limit in unusual cases up to a maximum of age 75. The
Board approved these changes as recommended by the Governance Committee.
Composition of Board Committees
The Governance Committee undertook a review of the composition of the Board’s committees in late 2007. The last time such a review
was conducted by the Governance Committee was in April 2006. The Board’s Governance Guidelines establish the general rule that
committee memberships and committee chairs should be rotated every three years. Other considerations the Governance Committee took
into account in its review included: 1) leveraging the Board’s knowledge by placing each director on the committees where he or she can
best add value; 2) being respective of each director’s own outside time commitments; and 3) where possible, providing for continuity on
each committee. As part of its recommendation to the Board, the Governance Committee proposed to eliminate the requirement that an
Audit Committee member may not serve on another Board committee. The Governance Committee noted that the Audit Committee’s
workload is now more regularly balanced than it was in 2005 when the requirement was first adopted. Upon conclusion of its review, the
Governance Committee recommended a new committee realignment to the Board which was approved at the Board’s December 2007
meeting and implemented at its February 2008 meeting. The table on page 20 of this Proxy Statement describes the present composition
of the Board’s committees resulting from this realignment.
Other Key Actions in 2007
Some of the other key actions taken by the Governance Committee last year are described below.
Director Independence
The Governance Committee assessed each non-management director’s independence based upon the Board’s Director Independence
Standards and those of the NYSE, and made recommendations to the full Board regarding each non-management director’s
independence.
Board Business Plan
Based on the Governance Committee’s assistance, the Board last year continued its practice of establishing an annual Board business
plan. The business plan is the end product of a formal process developed by the Governance Committee to annually establish and
prioritize the Board’s goals. A more detailed description of this process appears on page 23 of this Proxy Statement. The Governance
Committee tracked the Board’s performance against its business plan and provided periodic reports to the Board on its progress.
Governance Committee Evaluation
The Governance Committee prepared and conducted an annual self-evaluation, discussed the results of this evaluation and developed an
action plan from these discussions to further enhance the Governance Committee’s performance.
Diversity Advisory Panel’s Recommendations
The Governance Committee met with the Company’s Chief Diversity Officer to assess the Company’s progress with regard to the
recommendations of the Diversity Advisory Panel, a seven-member, blue-ribbon panel launched in 2001 to provide advice on the
Company’s comprehensive diversity strategy and assess future diversity trends and the potential impact on Kodak.