Pep Boys 2010 Annual Report Download - page 37

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31
(ITEM 3) ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON
EXECUTIVE COMPENSATION
Section 14A of the Securities Exchange Act requires us to submit a non-binding, advisory resolution to
shareholders at least once every six years to determine whether advisory votes on executive compensation should be
held every one, two or three years.
In voting on this resolution, you should mark your proxy for one, two or three years based on your preference as
to the frequency with which an advisory vote on executive compensation should be held. If you have no preference
you should abstain.
The optimal frequency of vote necessarily turns on a judgment about the relative benefits and burdens of each of
the options. There have been diverging views expressed on this question and the Compensation Committee and the
full Board believe that there is a reasonable basis for each of the options.
Some have argued for less frequency. They point out that a less frequent vote would allow shareholders to focus
on overall design issues rather than the details of individual annual decisions and would avoid the burden that annual
votes would impose on shareholders required to evaluate the compensation programs of a large number of companies
each year.
Others believe that an annual vote is needed to give shareholders the opportunity to react promptly to emerging
trends in compensation, provide feedback before those trends become pronounced over time, and give the
Compensation Committee and the full Board the opportunity to evaluate individual compensation decisions each
year in light of the ongoing feedback from shareholders.
After considering these divergent views, the Compensation Committee and the full Board believe that the most
appropriate frequency to hold an advisory vote on executive compensation is annually.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
“FOR”
THE HOLDING OF ADVISORY VOTES ON EXECUTIVE COMPENSATION EVERY YEAR