Pep Boys 2011 Annual Report Download - page 142

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Components of Compensation.
The compensation provided to the executives listed in the Summary Compensation Table, whom
we refer to as our named executive officers, consists of base salaries, short-term cash incentives, long-
term equity incentives, retirement plan contributions and health and welfare benefits.
Base Salary. The Compensation 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 appropriate to retain high quality individuals. The full Board measures the President &
Chief Executive Officer’s individual performance during the applicable fiscal year in the areas of
strategic planning and execution, leadership, financial results, management development and succession
planning, key stakeholder focus, ethics and Board relations, based upon individual assessments
completed by each Director. The Compensation Committee reviews the President & Chief Executive
Officer’s assessments of each other named executive officer’s individual performance during the
applicable fiscal year in the areas of core and positional competencies. Salary adjustments are then
made taking into account the performance assessment, the relative position of the named executive
officers current salary within the market range for his position and the budgeted percentage increase
for all officers as a group. For fiscal 2011, the Compensation Committee recommended, and the full
Board approved, adjustments to each of the named executive officers’ base salaries, to reflect each
executive’s performance in fiscal 2010 and to more closely align each executive’s salary with the market
range for such executive’s position. Messrs. Odell, Arthur, Shull, Webb and Cirelli received increases of
1.5%, 3.3%, 6.7%, 10.3% and 1.3%, respectively. In addition, each named executive officer received an
$8,000 increase to their base salary to reflect the after-tax value of the executive supplemental medical
plan that was eliminated for fiscal 2011.
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.
In order to directly align our named executive officers’ short-term incentive compensation with that of
our overall performance, these pre-established goals consist entirely of corporate (as opposed to
individual) objectives. For fiscal 2011, the named executive officers’ annual short-term incentive
opportunity was as follows:
% of Base Salary
Title Threshold Target Cash Cap(a) Maximum
President & CEO . . . . . . . . . . . . . . . . . . . 50 100 150 200
Executive Vice President .............. 37.5 75 112.5 150
Senior Vice Presidents ................ 22.5 45 67.5 90
(a) Amounts achieved above the ‘‘cash cap’’ percentage up to the ‘‘maximum’’ percentage are
earned and paid out over the subsequent three years, assuming the executive remains
employed by the Company.
98