Pep Boys 2011 Annual Report Download - page 141

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comparably-sized companies in the broader hardlines retail industry. The peer group is reviewed
annually by the Compensation Committee, together with its compensation consultant, to ensure that it
remains relevant. The current peer group includes: Aarons, Advance Auto Parts, Autozone, Big 5
Sporting Goods, Cabela’s, Conn’s, Dick’s Sporting Goods, hhgregg, Midas, Monro Muffler & Brake,
O’Reilly Automotive, PetSmart, RadioShack, Rent-A-Center, Tractor Supply and West Marine. In some
cases, Pep Boys analyzes competitive pay practices in the general industry for positions where
incumbents may typically be recruited from outside of the hardlines retailing sector.
The Compensation Process.
For fiscal 2011, the Compensation Committee recommended to the full Board the annual total
compensation levels for all of the named executive officers (other than the President & Chief Executive
Officer), based on recommendations made by the President & Chief Executive Officer and the Senior
Vice President—Human Resources, and in consultation with Pay Governance, the Compensation
Committee’s compensation consultant. The Compensation Committee recommended to the full Board
the annual total compensation level for the President & Chief Executive Officer after consulting with
Pay Governance. Our CEO was not involved in formulating recommendations as to his own
compensation.
To arrive at its recommendations for compensation to be paid to our CEO and other named
executive officers, the chair of the Compensation Committee scheduled and developed the agenda for
committee meetings in consultation with the Senior Vice President—Human Resources. The Senior
Vice President—Human Resources was responsible for developing appropriate materials for the
Compensation Committee’s review and consideration and for reviewing these materials and
recommendations with the chair of the Compensation Committee and Pay Governance prior to their
presentation to the Compensation Committee. Our President & Chief Executive Officer was principally
responsible for recommendations made to the Compensation Committee with respect to the
compensation of our named executive officers (other than himself) and other officers of the
corporation. The Compensation Committee considered, but was not bound to and did not always
accept, management’s recommendations with respect to executive compensation. The President & Chief
Executive Officer, Senior Vice President—Human Resources and Senior Vice President—General
Counsel & Secretary attended all committee meetings, excluding portions of meetings where their own
compensation was discussed, and excluding the regular executive sessions held at the conclusion of each
meeting of the Committee.
In connection with establishing compensation levels for fiscal 2011, Pay Governance advised the
Compensation Committee on the then-current competitiveness of our program design and award
values. Representatives of Pay Governance regularly attended committee meetings and also
communicated with the chair of the Compensation Committee outside of meetings. Pay Governance
worked with management (including the President & Chief Executive Officer, Senior Vice President—
Human Resources and Senior Vice President—General Counsel & Secretary) from time-to-time for
purposes of gathering information and reviewing and providing input to management on
recommendations, proposals and materials that management presented to the Compensation
Committee. Pay Governance was engaged directly by the Compensation Committee and did not
provide any additional services to the Company in fiscal 2011.
The Compensation Committee and the Board of Directors consider our overall compensation
levels for the named executive officers to be reasonable and appropriate and believe that our executive
compensation program achieves the objectives outlined at the beginning of this summary.
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