Kodak 2010 Annual Report Download - page 166

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For 2010, the Company has two first-time Named Executive Officers: Mr. Jotwani, who joined the Company on September 28, 2010 and
was elected as President, Consumer Digital Imaging Group, CMO and SVP, and Ms. McCorvey, who was elected as CFO and SVP
effective November 5, 2010.
Mr. Jotwani is responsible for leading the Consumer Digital businesses, corporate marketing and branding, and the customer relationship
management activities of the Company. In determining his target total direct compensation, the Committee considered his significant
experience and skill, internal relative responsibility, prior compensation, and market reference data for similar positions at similarly sized
companies. As a result, the Committee approved the target total direct compensation listed above. In addition to his target total direct
compensation, Mr. Jotwani received a new hire award of 250,000 stock options that vest in substantially equal installments over a three
year period and 100,000 restricted stock units that vest in equal installments on the third and fourth anniversaries of the grant date. The
Committee awarded these equity grants in order to replace equity value which Mr. Jotwani forfeited by joining the Company and to provide
a hiring incentive to attract him to the Company.
The Board elected Ms. McCorvey as CFO and SVP following the voluntary resignation of Mr. Sklarsky. In determining Ms. McCorvey’s
target total direct compensation, the Committee considered her prior experience and skill, internal relative responsibility, and market
reference data for similar positions at similarly sized companies. As a result of this analysis, the Committee established the target total
direct compensation listed above. In connection with her promotion, the Committee also granted Ms. McCorvey 15,000 stock options,
which vest in substantially equal installments over a three-year period.
Further details on decisions for each element of target total direct compensation are described below in the section on Elements of Target
Total Direct Compensation.
Use of Tally Sheets
The Committee annually reviews all components of each Named Executive Officer’s compensation as presented in a set of Tally Sheets
prepared by the Consultant. The Tally Sheets provide a comprehensive view of each Named Executive Officer’s compensation, consisting
of three components:
1) An estimate of projected annual compensation, including target total cash compensation, the total estimated value of annual
long-term equity awards and the value of benefits and perquisites received by each Named Executive Officer;
2) A comprehensive summary of the vested and unvested values of all outstanding equity awards held by each Named Executive
Officer at current and assumed future stock prices; and
3) A summary of the severance benefits potentially payable to each Named Executive Officer as of year-end under various
termination scenarios.
The Tally Sheets provide the Committee with context for the decisions it makes in relation to total direct compensation. The Tally Sheets
allow the Committee to holistically assess total direct compensation and the relationship of its various components to each other. The Tally
Sheets also enable the Committee to determine the extent to which wealth creation exists through equity-based compensation and to
assess the strength of retention power as a result of unvested value. The Tally Sheets may also influence the Committee’s views on a
variety of other issues, such as changes to severance plans and individual letter agreements, special equity grants to promote retention or
changes in long-term equity incentives. In 2010 the Tally Sheet review supported the decision to eliminate the excise tax gross-up payment
provision from the Executive Protection Plan.
Use of the CEO Evaluation Process
The Presiding Director and the Chair of the Committee, with support from our Chief Human Resource Officer (CHRO), lead the annual
CEO evaluation process to assess the performance of our CEO. In the early part of each year, our CEO completes a written self-
assessment of his performance against the business plan of record for the prior year. This written assessment is sent to the full Board for
review. The CHRO then interviews each member of the Board to collect feedback against an established set of criteria, including reaction
to our CEO self-assessment and the Company’s leadership imperatives, which are: 1) “Drives to Win;” 2) “Develops Leaders;” and 3)
“Leads With Values.” The CHRO summarizes the input of each Board member for review with the Presiding Director and the Chair of the
Committee. The Presiding Director and the Chair of the Committee discuss the summary with the Board and subsequently review the
feedback with our CEO. Since the same director currently serves as both the Presiding Director and the Chair of the Committee, the Chair
of the Finance Committee of the Board participates as co-leader of this process for 2010 performance. This review provides input for the
Committee’s potential exercise of discretion associated with Mr. Perez’s EXCEL award, as well as target annual equity grants.
ELEMENTS OF TOTAL DIRECT COMPENSATION
Base Salaries
Base salaries provide a regular source of income to our Named Executive Officers. Consistent with our philosophy of tying pay to
performance, our Named Executive Officers receive a relatively small proportion (15% – 31%) of target total direct compensation in the
form of base salary.