Pep Boys 2009 Annual Report Download - page 21

Download and view the complete annual report

Please find page 21 of the 2009 Pep Boys annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 164

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164

15
Committee and our compensation consultants. Our Chief Executive Officer had input on the recommendations to the
Compensation Committee with respect to the compensation of our named executive officers (other than himself) and
other officers. The Compensation Committee considered, but was not bound to and did not always accept,
management’s recommendations with respect to executive compensation. The Senior Vice President – Human
Resources, regularly, and the Chief Executive Officer, on occasion, attended committee meetings, excluding portions
of meetings where their own compensation was discussed.
In connection with establishing compensation levels for fiscal 2009, Towers Perrin advised the Compensation
Committee on the then current competitiveness of program design and award values. The compensation consultant
periodically attended committee meetings and also communicated with the chair of the Compensation Committee
outside of meetings. The compensation consultant worked with management (including the Chief Executive Officer,
Senior Vice President - Human Resources and General Counsel) from time to time for purposes of gathering
information and reviewing and providing input to management on recommendations, proposals and materials that
management took to the Compensation Committee. In fiscal 2009, Towers Perrin, who was engaged directly by the
Compensation Committee, did not provide any additional services to the Company.
The Compensation Committee and the Board of Directors consider our overall compensation levels for the
named executive officers to be reasonable and appropriate.
2010 Update. Effective for fiscal 2010, the Compensation Committee adopted the following statement of
Executive Compensation Philosophy to further define and detail the objectives of our executive compensation
program:
Pep Boys’ executive compensation program is designed to:
• Enable Pep Boys to attract, retain, and motivate key executives who are critical for current and long-term
success;
• Provide targeted compensation levels which are competitive as to base salary, annual incentives and long-
term incentives, and which are reflective of current and/or expected future company performance levels;
• Support Pep Boys’ long-range business strategy;
• Establish a clear linkage between individual performance objectives and corporate or business unit financial
performance objectives; and
• Align executive compensation with shareholder interests by linking long-term incentives to increasing
shareholder value, utilizing performance metrics where appropriate.
In order to maintain a competitive total compensation program, Pep Boys compares itself with a custom peer
group comprised of similar-sized companies in the automotive service and retail business as well as the broader
hardlines retail industry. In some cases, Pep Boys analyzes competitive practices in general industry for those
positions that may be occupied by officers and executives recruited from outside of these industries.
Additional Considerations:
• Short term incentives will be structured in a manner which gives primary emphasis to meeting or exceeding
the company’s annual financial objectives;
• Long-term incentives will be designed to reward performance over a multi-year time frame, with vesting of
awards to occur over a corresponding time period;