Staples 2015 Annual Report Download - page 30

26 STAPLES Notice of Annual Meeting of Stockholders
i DIRECTOR COMPENSATION
The Compensation Committee is responsible for reviewing
and making recommendations to our Board with respect
to the compensation paid to our non-employee directors
(“Outside Directors”). Our Outside Directors are predominantly
compensated through equity awards, reflecting the
Compensation Committee’s philosophy that director pay
should be aligned with the interests of our shareholders.
It is the Compensation Committee’s goal to maintain a level of
Outside Director compensation at the median of companies
both within our peer group as well as similarly-sized
companies in our general industry. The Compensation
Committee annually reviews an extensive analysis of
marketplace practices for Outside Director pay conducted
by management and reviewed by the Compensation
Committee’s independent advisor. Consistent with our equity
program for associates, the Outside Director compensation
program also reflects a value-based approach to equity
grants in which the amount of the awards made to Outside
Directors is based on a fixed value rather than a fixed number
of shares.
2015 COMPENSATION
Each Outside Director receives an annual equity grant equal
to $175,000 in the form of restricted stock units. The annual
grants vest after one year. In addition, the following Outside
Directors receive additional annual equity grants: (a) the
Independent Lead Director receives restricted stock units
with a value of $40,000; (b) each chairperson of the Audit
Committee, Compensation Committee and Nominating and
Corporate Governance Committee receives restricted stock
units with a value of $32,000; and (c) the chairperson of the
Finance Committee receives restricted stock units with a
value of $16,000. In each case, these additional grants vest
on the date of each of the four regularly scheduled quarterly
Board meetings that such Independent Lead Director or
chairperson holds such position and are paid in shares on the
one year anniversary of the award. In addition, each Outside
Director receives a quarterly cash payment of $18,750 and
is reimbursed for reasonable expenses incurred in attending
meetings of our Board. The chairperson of the Audit
Committee receives an additional quarterly cash payment
of $3,750.
New Outside Directors receive a one-time initial grant of
restricted stock units equal to $150,000, which vests after
three years. Mr. Ferrand and Mr. Kamlani received this initial
grant in 2015, on the second business day following the 2015
Annual Meeting.
All Outside Directors are subject to a stock ownership
guideline of five times the annual Board cash retainer and
have five years after joining the Board to meet such ownership
guideline. In 2015, all directors met the guidelines.
During fiscal year 2015, on the second business day following
the 2015 Annual Meeting, each of our Outside Directors
elected at the meeting received their annual restricted stock
unit grants. The number of shares of restricted stock units to
be granted is determined by dividing the fixed value by the
closing price of our common stock on the date of grant. Upon
a change-in-control of Staples or upon a director leaving
our Board after reaching the age of 72, all of such director’s
restricted stock units would fully vest and be paid out.
2016 COMPENSATION
In March 2016, each then-serving Outside Director voluntarily
declined half of the quarterly cash payment of $18,750 for the
next four quarters of their service as a director, in response to
the pressures on our share price in fiscal year 2015. Each such
director will therefore temporarily receive a reduced quarterly
cash payment of $9,375 in June, September, and December
of 2016, and March of 2017.