Neiman Marcus 2009 Annual Report Download - page 60

Table of Contents
consistent with the interests of our equity investors. The Compensation Committee believes that the mix of compensation components
used in the determination of our named executive officers' compensation does not encourage our named executive officers to take
unreasonable risks relating to the business. For further information, see "Risk Assessment of Compensation Policies and Programs" on
page 56.
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. The Compensation Committee does not generally retain the services of any
compensation consultants. Management retains an independent compensation consultant, W. T. Haigh & Company, to provide
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. The fees paid to W. T. Haigh & Company for their services in
fiscal year 2010 did not exceed $120,000.
2010 Executive Officer Compensation
We target our direct compensation to be positioned between the 50th and 75th percentile levels of the compensation packages
received by executives in our peer group of industry related companies. We believe that this practice is appropriate in light of the high
level of commitment, job demands, and the expected performance contribution required from each of our executive officers in our
highly competitive marketplace. Ultimately, our named executive officers' total compensation is based on the level of achievement
versus Company, business unit, and individual target performance levels. The Compensation Committee uses its discretion in making
decisions on the overall compensation packages of our executive officers based on current market conditions, business trends, and
overall Company performance.
Base Salary. Due to the uncertain market conditions and consistent with our cost-saving measures, there was no change to
the base salaries for the executive officers in fiscal year 2010.
2009 Base
Salary
($)
2010 Base
Salary
($)
Percent
Increase
(%)
Burton M. Tansky 1,497,600 1,497,600 0.0%
Karen W. Katz 897,600 897,600 0.0%
James E. Skinner 628,800 628,800 0.0%
James J. Gold 499,200 499,200 0.0%
Gerald A. Barnes 425,000 425,000 0.0%
Information on amounts actually earned by the named executive officers in fiscal years 2008, 2009, and 2010 can be found in
the Summary Compensation Table beginning on page 62 of this section.
Annual Incentive Bonus. In determining annual incentive bonus amounts for the named executive officers, the Compensation
Committee considers the performance relative to the pre-established goals that are set at the beginning of the year. In order to focus
the management team on financial recovery following the extraordinary economic conditions in fiscal year 2009, the Compensation
Committee used only financial metrics to determine the annual incentive bonus amounts for fiscal year 2010. Individual performance
goals of each of the named executive officers were evaluated by the Compensation Committee but used only in consideration of merit
increases. For fiscal year 2010, the annual financial goals were based on Adjusted EBITDA, return on invested capital (ROIC), or
inventory turnover performance as described more fully on page 58. The Committee set the threshold, target, and maximum
performance targets at levels they believed were challenging based on historical company performance and industry and market
conditions. Goals were established at the division and business unit levels where appropriate for each of the named executive
officers. As it relates to our annual incentive compensation program in particular, this performance assessment is a key determinant in
total compensation paid to our named executive officers. Fiscal year 2010 target annual incentives and relative performance
weightings for the named executive officers were as follows:
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