Neiman Marcus 2009 Annual Report Download - page 61

Table of Contents
Target Bonus
As Percent of Relative Performance Weighting
Name Salary Company Division
Burton M. Tansky 100% 100% —
Karen W. Katz 75% 50% 50%
James E. Skinner 65% 100% —
James J. Gold 60% 50% 50%
Gerald A. Barnes 60% 50% 50%
Mr. Tansky, the individual with the greatest overall responsibility for company performance, was granted a larger incentive
opportunity in comparison to his base salary in order to weight his annual cash compensation mix more heavily towards performance-
based compensation. For each of the named executive officers, the Compensation Committee deemed their potential impact on
company results as equally significant.
Discretionary Bonus. In February 2010, the Compensation Committee approved a one-time discretionary bonus for certain
key executive officers, including each of the named executive officers, in an amount equal to four percent of base salary. The bonuses
were approved based on the executives' contributions toward improving the profitability of the Company in light of the challenging
economic and operating environment and the four percent salary reduction that occurred in March 2009. Actual amounts paid to each
of the named executive officers are listed in the Summary Compensation Table beginning on page 62 of this section under the column
titled Bonus.
Corporate Performance Targets. At the end of the fiscal year, the Compensation Committee evaluates Company
performance against specific financial and strategic performance targets set at the beginning of the fiscal year. For fiscal year 2010,
the bonus metrics and weightings for Messrs. Tansky and Skinner were based on overall Adjusted EBITDA and ROIC; for Ms. Katz ,
overall Adjusted EBITDA and ROIC and Adjusted EBITDA and Inventory Turnover at Neiman Marcus Stores; for Mr. Gold,
Adjusted EBITDA and Inventory Turnover at Bergdorf Goodman, and for Mr. Barnes, Adjusted EBITDA and Inventory Turnover at
Neiman Marcus Direct. The bonus metrics related to threshold, target and maximum annual incentive bonus payouts for fiscal year
2010, as well as actual amounts achieved and actual payout percentages for fiscal year 2010, are as follows:
Threshold Target Maximum Achieved
Payout As
Percent of
Target
Neiman Marcus Group
Adjusted EBITDA (in millions) $ 325 $ 435 $ 510 $ 467 142%
ROIC 9.72% 16.72% 19.72% 21.47% 200%
Neiman Marcus Stores
Adjusted EBITDA (in millions) $ 241 $ 312 $ 356 $ 299 62%
Inventory Turnover 2.105x 2.145x 2.168x 2.200x 200%
Neiman Marcus Direct
Adjusted EBITDA (in millions) $ 89 $ 114 $ 136 $ 129 166%
Inventory Turnover 3.784x 3.852x 3.910x 4.049x 200%
Bergdorf Goodman
Adjusted EBITDA (in millions) $ 54 $ 72 $ 86 $ 92 200%
Inventory Turnover 3.155x 3.215x 3.260x 3.466x 200%
In calculating Adjusted EBITDA for purposes of evaluating performance and annual incentive compensation, the
Compensation Committee adjusts EBITDA upwards or downwards, as applicable, for events and circumstances that 1) were not
anticipated at the time performance targets were set and 2) were not impacted by or under the control of the named executives. This
adjustment is performed by the Compensation Committee at the end of each fiscal year, based upon any such events and
circumstances during such year. The upwards adjustments that were made by the Compensation Committee to EBITDA in order to
calculate Adjusted EBITDA for purposes of evaluating performance and annual incentive compensation for fiscal year 2010
aggregated $19.9 million, consisting of the costs incurred in connection with the outsourcing of certain information technology
processes, corporate business initiatives and other corporate costs. All such
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