Kodak 2009 Annual Report Download - page 176

32
• The Finance Committee oversees risk management relating to the Company’s capital structure and insurance program.
• The Governance Committee oversees risk management relating to the Company’s health, safety and environmental risk management
program.
In 2009, the Compensation Committee reviewed a report from management on an assessment of risks relating to the Company’s
compensation programs and awards. The assessment concluded, and the Compensation Committee agreed, that such programs and
awards do not present any material adverse risks to the Company.
DIRECTOR COMPENSATION
Introduction
Our directors are compensated through a combination of cash retainers and equity-based incentives. Consistent with the Board’s Director
Compensation Principles, a substantial portion of director compensation is linked to our stock performance. In addition, directors can elect
to receive their entire Board remuneration in equity-based compensation. Kodak does not pay management directors for Board service in
addition to their regular employee compensation.
Director Compensation Principles
The Board has adopted the following Director Compensation Principles, which are aligned with the Company’s executive compensation
principles:
• Pay should represent a moderately important element of Kodak’s director value proposition.
• Pay levels should generally target near the market median, and pay mix should be consistent with market considerations.
• Pay levels should be differentiated based on the time demands on directors’ roles, and the Board will ensure regular rotation of
certain of these roles.
• The program design should ensure that rewards are tied to the successful performance of our common stock, and the mix of pay
should allow flexibility and Board diversity.
• To the extent practicable, Kodak’s Director Compensation Principles should parallel the principles of the Company’s executive
compensation program.
Review
The Governance Committee, which consists solely of independent directors, has the primary responsibility for reviewing and considering
any changes to the Board’s compensation program. The Board reviews the Governance Committee’s recommendation and determines the
amount of director compensation.
The Governance Committee last completed a review of the Board’s compensation program in 2007. In connection with this review, the
Governance Committee retained Pearl Meyer & Partners, independent compensation consultant, to competitively assess our director
compensation relative to market trends and comparable peer companies.
Director Compensation Program
The annual cash and equity components of the Company’s director compensation program are now as follows:
Cash(1)
Equity(2)
Board Retainer
(3)
Chair/Presiding
Director Retainer
(4)
Restricted Stock
(5)
Stock Options
(6)
Total
Director
$70,000
—
$70,000
$70,000
$210,000
Presiding Director(7)
70,000
$100,000
70,000
70,000
310,000
Audit Committee Chair
70,000
20,000
70,000
70,000
230,000
Compensation Committee Chair
70,000
10,000
70,000
70,000
220,000
Finance Committee Chair
70,000
10,000
70,000
70,000
220,000
Governance Committee Chair
70,000
10,000
70,000
70,000
220,000
(1) For the cash portion of the directors’ retainers, payment is made twice a year. In 2009, the Board decided to reduce the second
cash retainer payment for 2009 by 10% for the Board Retainer and the Chair/Presiding Director Retainer in recognition of the
challenging economic environment and its impact on the Company and to align with the salary reductions taken by management
as discussed on page 47 of this Proxy Statement. This reduction in the directors’ cash compensation is reflected in the Director
Compensation Table below.