Kodak 2008 Annual Report Download - page 145

19
EXECUTIVE COMPENSATION AND DEVELOPMENT COMMITTEE
The Compensation Committee is comprised of five members of the Board, all of whom are independent in accordance with the Board’s
Director Independence Standards, which standards reflect the NYSE’s director independence standards. The Compensation Committee
assists the Board in fulfilling its responsibilities in connection with the compensation of its executives, including our Named Executive
Officers. It performs this function by overseeing the Company’s executive compensation strategy, overseeing the administration of its
executive compensation and long-term equity incentive compensation plans, assessing the effectiveness of the Company’s executive
compensation plans, reviewing and approving the compensation of the Company’s CEO, and reviewing and approving the compensation
of the Company’s Named Executive Officers and other Section 16 Executive Officers. The entire Board reviews the Company’s succession
plans for its CEO and other key positions, and oversees the Company’s activities in the areas of leadership and executive development.
The Compensation Committee operates under a written charter adopted by the Board, which details the Compensation Committee’s duties
and responsibilities. A current copy of the Compensation Committee’s charter can be accessed at www.kodak.com/go/governance.
The full Board sets the compensation of the Company’s non-employee directors based on the recommendation of the Governance
Committee.
The Compensation Committee has delegated limited authority to the Company’s Chief Human Resources Officer to assist the
Compensation Committee with administration of the Company’s executive compensation and equity-based compensation plans. The Chief
Human Resources Officer is authorized to amend any executive compensation or equity-based compensation plan in which our Named
Executive Officers participate other than to materially increase the benefits accruing to a participant under the plan, increase the number of
shares available for issuance under the plan or substantially modify the requirements as to eligibility for participation. The Chief Human
Resources Officer has also been delegated the authority to amend award agreements under any executive compensation and equity-
based compensation plan other than to increase the benefits accruing to the participant and to determine the manner and timing of
payments under the Eastman Kodak Company 1982 Executive Deferred Compensation Plan (EDCP).
The Compensation Committee meets routinely throughout the year. It is the Compensation Committee’s policy to make most
compensation decisions in a two-step process to ensure sufficient deliberation. The Compensation Committee approves all compensation
and awards under the Company’s executive compensation plans for each of the Company’s Named Executive Officers. The Compensation
Committee also approves compensation levels for each component of total direct compensation following discussions and after review of
analyses and recommendations received from its independent compensation consultant and management, as it deems appropriate. The
CEO, Chief Human Resources Officer and Director of Global Compensation make recommendations regarding each compensation
element for the Named Executive Officers other than the CEO. The Compensation Committee’s independent compensation consultant and
the Director of Global Compensation present analyses and recommendations regarding CEO compensation to the Compensation
Committee in executive sessions.
With respect to the Company’s executive performance-based plans, management, including the CEO, CFO, Chief Human Resources
Officer and Director of Global Compensation, proposes performance goals. The CEO and Chief Human Resources Officer are involved in
formulating recommendations to the Compensation Committee on award levels for each Named Executive Officer for the upcoming
performance year, with the exception of award levels for the CEO. Management develops these performance targets considering the
Company’s strategic and operational imperatives for the year and its executive compensation strategy and goals. Generally, the
performance targets and individual award targets for the Company’s annual variable pay plan are reviewed and approved by the
Compensation Committee within the first 90 days of each calendar year. The performance targets of the Company’s long-term equity
incentive compensation plans for the new performance cycle are reviewed and approved by the Compensation Committee within the first
90 days of each calendar year while annual stock option grants and allocations for the Leadership Stock Program for the next performance
cycle are generally established in December of the prior year. Throughout the year, the Compensation Committee reviews projections for
achievement of each plan’s performance targets.
Role of Compensation Consultant
To assist the Compensation Committee in evaluating the Company’s executive compensation plans, the Compensation Committee
engaged an independent compensation consultant, Frederic W. Cook & Co., Inc., to advise it directly. The Compensation Committee’s
consultant attends Compensation Committee meetings on a regular basis and provides the Compensation Committee with market
information and analysis with respect to establishing executive compensation practices that are in line with the Company’s executive
compensation strategy and goals. The consultant is also asked to confirm that the Company’s executive compensation goals continue to
be aligned with best practices.