Pep Boys 2011 Annual Report Download - page 22

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16
Peer Group.
In order to maintain a competitive total compensation program, Pep Boys compares itself with a custom peer
group comprising key competitors in the automotive service and retail business,as well as 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 meetingsin 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 wasnot 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 communicatedwith 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.