Staples 2007 Annual Report Download - page 43

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Based on its assessment of our 2006 fiscal year performance, analysis of data derived from various analytic tools,
and consideration of the totality of the advice and information provided to it, the Compensation Committee found
that the named executive officers had been appropriately compensated in our 2006 fiscal year and set compensation
for our 2007 fiscal year. Some of the Compensation Committee’s key findings were:
• Both individually and as a group, the named executive officers had in our 2006 fiscal year effectively helped
create long term stockholder value by increasing earnings per share by 27% and achieving return on net assets
of 14.3%, exceeding our long term goal;
• Each of the named executive officers had challenging and wide ranging responsibilities commensurate with
their overall pay package;
• The salary of the Chief Executive Officer was less than two times the salary of the next highest paid named
executive officer, and the total annual targeted direct compensation for the Chief Executive Officer was slightly
greater than two times that of the next highest paid named executive officer;
• The market for executive talent continues to tighten and become more competitive, significantly increasing the
risk that our named executive officers will be actively recruited by other companies, including our direct
competitors, private equity investors and other leading organizations across the retail sector; and
• Staples continued to foster a culture of integrity and commitment to compliance with the law and our Code of
Ethics, as evidenced by its continued inclusion in the Dow Jones Sustainability Index.
Throughout this Compensation Discussion and Analysis, we refer to the sum of base salary, performance based
annual cash bonuses and long term equity incentives as ‘‘total direct compensation’’ and we refer to the sum of base
salary and performance based annual cash bonuses as ‘‘total cash compensation.’’
Pay Mix
The Compensation Committee relies upon its judgment and not upon rigid guidelines or formulas or short term
changes in our stock price in determining the amount and mix of compensation elements for each named executive
officer. We seek to achieve our executive compensation objectives through the use of five compensation components,
which are summarized in the below table.
Principal Contributions to
Compensation Component Compensation Objectives Highlights
Base salary • Attracts, retains and rewards talented • Targeted at median of comparable peer
executives with annual salary that reflects group positions.
the executive’s performance, skill set and • Only component of compensation that is
value in the marketplace. guaranteed.
• Can be most influenced by individual
performance.
• Comprises less than 20% of total direct
compensation (base salary + target
bonus + target equity) for our named
executive officers.
33