Kodak 2008 Annual Report Download - page 162

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The Committee made the following decisions in 2008, which are described and referred within this Compensation Discussion and Analysis
as the “2008 Awards.”
2008 Executive Compensation Determination Timeline
Committee Meeting
Compensation Determination
2008 Base salary considerations
February-08
2008 Annual variable pay plan (Executive Compensation for Excellence and Leadership: EXCEL) target
opportunity
Aggregate 2009 target dollar value, form and mix of long-term equity incentive awards
December 2008 stock option grant
January 2009 Leadership Stock allocation (Kodak's performance stock unit plan)
December-08
January 2009 restricted stock unit (RSU) grant
2008 Annual variable pay plan (EXCEL) award certification
January-09
2008 Leadership Stock certification
2009 Base salary considerations
February-09
2009 Annual variable pay plan (EXCEL) target opportunity
Decisions made by the Committee in 2007, which impacted 2008 compensation, were described in the Notice of 2008 Annual Meeting and
Proxy Statement.
Factors Considered by the Committee to Determine Level and Mix of Total Direct Compensation
The Committee considers a broad range of facts and circumstances when determining levels of executive compensation. Among the
factors that the Committee considers are: 1) market competitiveness; 2) experience relative to typical market peers; 3) the importance of
the position in the Company relative to other senior management positions; 4) sustained individual performance; 5) readiness for
promotion to a higher level and/or role in the Company’s senior management succession plans; and 6) retention of critical talent. The
significance of any individual factor will vary from year-to-year and may vary among Named Executive Officers.
The Committee establishes each Named Executive Officer’s level of annual target total direct compensation after reviewing market data
and factors listed in the prior paragraph. In general, the Committee does not consider awards granted or earned under plans in past years,
or the effect of changes in the Company’s stock price when setting annual target total direct compensation levels of our Named Executive
Officers. The Committee does, however, consider equity awards granted in past years in the evaluation of the retentive value of the
Company’s long-term equity incentive plans and the mix of long-term equity incentives as further described on page 42 of this Proxy
Statement. In addition, the Committee averaged the Company’s stock price over a 60-day period when converting the dollar-denominated
annual long-term incentive target opportunities into share equivalents as discussed on page 46 of this Proxy Statement.
Competitive Compensation Analysis
To assist the Committee in its annual market review of each Named Executive Officer’s total direct compensation, the Consultant prepares
an analysis of the market competitiveness of the aggregate value of total direct compensation as well as the market competitiveness of
each element of total direct compensation for each Named Executive Officer. The Consultant derives the market data from the average of
data from national surveys in which the Company participates.
In 2008, market data was compiled from the Towers Perrin Executive Compensation Survey, the Hewitt Executive Compensation Survey
and the Radford Survey. These surveys are national non-industry specific compensation surveys. The data in each survey was size-
adjusted to be representative of companies with approximately $10.3 billion and $13.3 billion in revenue. The Committee reviewed this
competitive data for companies at both revenue levels to reflect the Company’s revenue size at the start of 2008 and its revenue size prior
to the divestiture of the Health Group on April 30, 2007. Given that the divestiture of the Health Group occurred in the prior year, the
Committee wanted visibility to the competitive target positioning at both revenue levels to ensure appropriate consideration for executives
who drove a divestiture decision in the best interest of shareholders. The number of companies included in the data with regard to each
survey is approximately 50.
The Committee does not review the individual companies who participate in these surveys. The Committee has used the national survey
data in lieu of a smaller group of specific companies to conduct a comparative analysis of total direct compensation because there were
few companies with a similar product portfolio, revenue and market capitalization size during the Company’s transformation and
emergence as a digital company. Based on the recommendation of its Consultant, the Committee believes these surveys provide a
reasonable representation of the cost to hire and retain executive talent.