Tech Data 2013 Annual Report Download - page 113

Table of Contents
Key Goals and Elements of Compensation
The following table describes the alignment of our compensation program’s goals with its key elements, and explains the rationale and philosophy
underlying those goals and elements:
In addition to our core elements of base salary, bonus, and equity awards, our compensation program includes other standard benefits that are
generally available to employees, such as medical and dental insurance, life insurance, and a 401(k) Savings Plan. The Company has a nonqualified
deferred compensation plan (the “Deferred Compensation Plan”) available to all senior management employees in the United States. NEOs are
offered participation in a modest Tech Data Corporation Executive Choice Plan (“Executive Choice Plan”)
designed to reimburse our executives for
perquisites such as tax and estate counseling, individual insurance premiums, personal and professional development expenses, and club
memberships. The total reimbursement is capped between $10,000 and $20,000, depending on the participant’s position. The Executive Choice
Plan does not have a tax reimbursement or “gross up” feature.
The Company maintains the Tech Data Corporation Executive Severance Plan (“Severance Plan”) to provide benefits to senior executives,
including NEOs, in the event of a Company-initiated, non-misconduct separation from the Company. The Severance Plan assists in attracting talent
and minimizing distraction by providing some security for both the Company and the executive through a transition period in the event the
employment relationship is not successful.
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Postponement of bonus payouts pending restatement
. The Company postponed making final bonus payouts for fiscal 2013 to NEO’s
pending completion of the restatement, and the bonus determinations were made based on restated fiscal 2013 financial results. Based
upon the results of the investigation referred to in Note 2 of Notes to Consolidated Financial Statements, the Committee and Board
concluded that none of the NEO's had engaged in the misconduct giving rise to the restatement and decided not to take further action
with respect to NEO fiscal 2013 compensation as a result of the restatement.
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Fiscal 2014 changes
. In March, 2013, the Company adopted a policy prohibiting its directors and executive officers from entering
into hedging or monetization transactions or similar arrangements with respect to Company securities, and also from pledging
Company securities as collateral (including by holding such securities in a margin account).
Goal Element of Compensation Rationale/ Philosophy
Retain leaders that drive
performance to achieve long-term
shareholder value.
Equity awards. We seek to provide an appropriate link between compensation and the creation of
long-term shareholder value. The type and size of equity awards and the layered
vesting schedules are intended to provide incentives to enhance long-term
Company performance, as reflected in stock price appreciation. This element of
compensation aligns executive motivation with shareholder interests and is also
considered to be our best retention tool.
Demonstrate responsible cost
management. Base salary, bonus, equity awards. Our Company operates on a very low cost model. Compensation awarded must be consistent with this approach. Salary and bonus are targeted to the median of
our peer group. Adjustments to our compensation levels are based upon the
Company’s annual operating plan. The type and size of equity awarded is
influenced by associated costs to the Company in relation to the operating plan.
Create targets and measures for the
individual that are challenging and
that will drive performance to
achieve short-term goals.
Bonus. Bonuses drive short-term performance because they are paid based upon the level
of achievement of performance measures aligned with the Company’s annual
operating plan.
Attract quality leaders. Base salary, bonus, equity
awards. The leaders of the Company guide the strategies and direct the Company’s assets (people, physical assets, business relationships and capital) to achieve both short-
term and long-term success. A solid compensation package is necessary to
compete in the market for quality leaders.