Pep Boys 2008 Annual Report Download - page 21

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The Human Resources Committee and the Board of Directors consider our overall compensation levels for the
named executive officers to be reasonable and appropriate.
Please note that the “Components of Compensation” discussion that follows is generally applicable to all named
executive officers who served as executive officers during fiscal 2008. Each of Messrs. Odell, Cirelli, Fee and
Webb, served as executive officers during the entirety of fiscal 2008. Mr. Arthur joined the Company during fiscal
2008. See the discussion that follows under, “New Executive Officer.” Messrs. Rachor and Yanowitz left the
employment of the Company during fiscal 2008. See the discussion that follows under, “Former Executive
Officers.”
Components of Compensation.
Base Salary. The Human Resources Committee reviews base salaries annually to reflect the experience,
performance and scope of responsibility of the named executive officers and to ensure that the salaries are at levels
that are appropriate to retain high quality individuals. The Human Resources Committee measures each named
executive officer’s individual performance during the applicable fiscal year on a five-point scale (1-unacceptable; 2-
requires improvement; 3-satisfactory; 4-commendable; 5-outstanding) in the areas of leadership, impact and
functional skills, based upon such executive officer’s supervisor’s assessment. An average performance value is
then applied against the relative position of the named executive officer’s current salary within the market range for
his position and the budgeted percentage increase for all officers as a group. For example, a named executive
officer with an average performance value of 5 whose current salary was at the lowest end of the market range for
his position would receive the highest salary increase. While a named executive officer with an average
performance value of 1 whose current salary was at the highest end of the market range for his position would
theoretically receive the lowest salary increase (in practice, such executive would not receive any increase and likely
would be terminated). These performance values are then applied against the relative position of the named
executive officer’s current salary within the market range for his position and the budgeted percentage increase for
all officers as a group. This budgeted percentage increase was 2.0% for fiscal 2008. However, consistent with our
plan to return Pep Boys to profitability, no named executive officer was awarded a merit-based increase to their
base salary for fiscal 2008.
Short-Term Incentives. The named executive officers participate in our Annual Incentive Bonus Plan, which is a
short-term incentive plan designed to reward the achievement of pre-established goals. Prior to fiscal 2008, these
pre-established goals included both corporate and individual objectives for our named executive officers (other than
our CEO). To more closely align our named executive officers’ compensation with that of our overall performance,
for fiscal 2008, we eliminated the use of individual objectives and tied our named executive officers’ short-term
incentives entirely to corporate objectives. For fiscal 2008, the named executive officers’ potential participation
levels were as follows:
% of
Salary
Title Threshold Target MAX CAP
CEO 50 100 150 200
EVP 37.5 75 112.5 150
SVP 22.5 45 67.5 90
For fiscal 2008, the corporate objectives, which are those financial measures deemed most important to Pep
Boys’ overall success, and their weightings were as follows:
Objective
Weighting
(%) Threshold Target MAX CAP
EBITDAR 80 $169,447,000 $176,161,000 $211,050,000 $246,511,000
Retail Net Promoter Score(a) 10 61 65 67 70
Retail Net Promoter Score(a) 10 41 45 47 49
(a) A customer satisfaction score that measures the likelihood of referring others to Pep Boys.