Neiman Marcus 2008 Annual Report Download - page 59

Table of Contents
Role of Management. As part of our annual planning process, the CEO and the Senior Vice President and Chief Human
Resource Officer, with the help of our consultants, develop and recommend a compensation program for all executive officers. Based
on performance assessments, the CEO and the Senior Vice President and Chief Human Resource Officer attend a meeting of the
Compensation Committee held for the purpose of considering the executives' annual compensation and recommend the base salary
and any incentive bonus awards or long-term incentive awards, if applicable, for each of the other executive officers, including the
named executive officers. Neither the CEO nor the Senior Vice President and Chief Human Resource Officer participate in the
portion of the Compensation Committee meeting during which their own compensation is discussed.
Role of the Compensation Consultants. In fiscal year 2009, W. T. Haigh & Company, Inc. continued to provide the
Compensation Committee and the Company comparative market data regarding executive compensation to assist in establishing
reference points for the principal components of compensation. They also provide information regarding compensation trends in the
general marketplace, compensation practices of other retail companies, and regulatory and compliance developments.
Competitive Market Assessment. The Compensation Committee requests information from the compensation consultants to
determine if any element of compensation needs adjustment in order to comply with our strategy of targeting executive compensation
that is between the 50th and 75th percentile levels of the compensation packages received by executives at a group of industry related
companies.
In fiscal year 2009, the Compensation Committee, on the recommendation of the consultants, referred primarily to the 16
companies identified below for purposes of benchmarking the compensation of our named executive officers. These companies are
intended to represent our competitors for business and talent. Their executive compensation programs are compared to ours, as well
as the compensation of individual executives if the jobs are sufficiently similar to make the comparison meaningful. The
compensation assessment includes an evaluation of base salary, target annual incentive opportunities, long-term incentive grant values
and benefits for each of the named executive officers relative to similar positions in the market. The comparison data is used to ensure
that the compensation for our named executive officers, both individually and as a whole, is appropriately competitive relative to our
performance.
— Abercrombie & Fitch
— Ann Taylor
— Coach
— Macy's
— The Gap
— Jones Apparel
— Kohl's
— Limited Brands
— Liz Claiborne
— Nordstrom
— Polo Ralph Lauren
— Saks
— Talbots
— Tiffany & Co.
— Tommy Hilfiger
— Williams-Sonoma
In addition to the select companies above, we also review various third party compensation survey reports.
Assessment of Fiscal Year 2009 Performance. In fiscal year 2009, we faced a challenging retail environment. Deteriorating
global economic conditions influenced customer spending behavior amidst concerns over declining asset values, the availability and
cost of credit, rising unemployment, and the stability and solvency of financial institutions, financial markets, and businesses. These
concerns have slowed global economic growth. As a result, we focused on areas of our operations that would provide profitable
growth opportunities as well as cost savings. The compensation actions taken for the named executive officers were based on these
objectives but also took into consideration the outside influences on company performance mentioned above.
2009 Executive Officer Compensation
We target our direct compensation to be positioned between the 50th and 75th percentile levels of the compensation packages
received by executives in our peer group of industry related companies. Ultimately, our named executive officers' total compensation
is based on the level of achievement versus Company, business unit, and individual target performance levels. The Compensation
Committee uses its discretion in making decisions on the overall compensation packages of our executive officers based on current
market conditions, business trends, and overall Company performance.
Base Salary. Due to the economic downtown and uncertainty of market conditions, a Company-wide salary reduction plan
was implemented, effective March 8, 2009, for all salaried employees including the named executive officers.
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