Neiman Marcus 2014 Annual Report Download - page 69

Table of Contents
Annual Incentive Bonus. In determining annual incentive bonus amounts for the named executive officers, the Compensation Committee considers
their performance relative to the pre‑established goals that are set at the beginning of the year. The Compensation 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, this performance assessment is a key variable in determining the amount of total compensation paid to our named executive officers.
Fiscal year 2015 target annual incentives and relative performance weights for the named executive officers were as follows:
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


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Karen W. Katz
125%
70%
30%
James J. Gold
75%
70%
30%
John E. Koryl
60%
70%
30%
Joshua G. Schulman (1)
60%
70%
30%
James E. Skinner
75%
70%
30%
(1) Since Mr. Schulman has responsibility over Bergdorf Goodman, 50% of Mr. Schulman's performance goals are based on the
results of Bergdorf Goodman.
Ms. Katz, the individual with the greatest overall responsibility for company performance, was granted the largest incentive opportunity in
comparison to her base salary to weight her annual cash compensation mix more heavily towards performance‑based compensation.
Mr. Grimes was not eligible to receive an annual incentive bonus with respect to fiscal year 2015.
Corporate Performance Targets. At the end of each fiscal year, the Compensation Committee evaluates the Company’s performance against the
financial and strategic performance targets set at the beginning of the fiscal year.
Metrics used for each executive, as well as the relative weights assigned to the metrics, are based on strategic business drivers of the particular
business unit or division that the executive manages. For fiscal year 2015, such metrics were based on Plan Earnings (as defined below) and sales. Bonus
payout percentages for fiscal year 2015 are as follows:
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
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
Plan Earnings
—%
Sales
—%

Plan Earnings
29.0%
Sales
30.4%
We define Plan Earnings as earnings before interest, taxes, depreciation and amortization, further adjusted to eliminate the effects of items
management does not consider in assessing our ongoing performance, but excluding amortization of inventory step‑up, non‑cash stock‑based compensation
expense, certain advisory and other fees, and certain other expenses.
2015 Annual Incentive Bonus. Actual operating performance for fiscal year 2015 for our Neiman Marcus operating division was below the
performance threshold set at the beginning of the year, and therefore no annual incentive amounts were paid to any of the named executive officers with
respect to our Neiman Marcus operating division. Actual operating performance for fiscal year 2015 for our Bergdorf Goodman operating division was above
performance threshold set at the beginning of the year, and an annual incentive bonus of $53,802 will be paid to Mr. Schulman based on the payout
percentages set forth in the table above. Ms. Katz and Messrs. Gold and Skinner have minimum threshold, target and maximum percentages of incentive
payouts pursuant to their employment agreements more fully described under “Employment and Other Compensation Agreements.” Mr. Grimes was not
eligible for an annual incentive bonus for fiscal year 2015.
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