Tech Data 2013 Annual Report Download - page 114

Table of Contents
Consistent with our cost-sensitive approach to compensation, we do not maintain supplemental or other non-qualified pension plans for the NEOs.
Our NEOs do not participate in any plans for retirement other than the 401(k) Savings Plan and the Deferred Compensation Plan, nor do we provide
post-retirement medical or life benefits.
Oversight of the Compensation Program and Participants in Setting Compensation
The Company’s executive compensation program is administered and overseen by the Committee with assistance from the CEO and other officers,
as appropriate, as outlined below. An independent compensation consultant is selected, retained by, and reports directly to the Committee to assist
the Committee with its duties.
Compensation amounts, measures, and criteria are determined using a combination of peer group data, considerations of various combinations of
compensation and historical compensation data provided to and discussed among the Committee, the independent compensation consultant and
senior management. The Committee also reviews potential upside and downside costs of the bonus program, including acceleration and
deceleration tables and caps, for affordability and reasonableness. In addition, the Committee evaluates legal perspectives from outside counsel,
considers rating agency opinions, published investor compensation policies, compensation policies published by proxy voting advisory firms, and
coordinates with the other committees of the Board to identify, evaluate and address potential compensation risks, if any, and to ensure valid
accounting treatment that is consistent with corporate and regulatory policies. The Committee also reviews and considers other Company programs,
such as succession planning and performance evaluations, in connection with the setting of compensation policies. Typically, much of the decision
making for the year is done to coincide with the March meetings of the Committee and Board, at which base salaries, bonus targets and equity
award percentages are determined. The Company’s NEO compensation program, with certain modifications, is the basis for the Company’s overall
executive compensation program.
Role of Consultants
- The Committee selects and engages a compensation consultant and authorizes its work. Reports and advice from the
consultant may be requested by and are shared between the Committee, the Board, and management. The Company’
s historical practice has been to
engage compensation consultants that are independent. In 2013, the Committee formalized this practice by amending its Charter to provide for the
evaluation of compensation consultant and advisor independence and conflicts of interest in compliance with applicable law and listing standards.
Our compensation consultant for fiscal 2013 was Exequity LLP. In November 2012, the Committee evaluated Exequity’s independence using the
factors set forth in NASDAQ Rule 5605(d)(3)(D) and confirmed Exequity’s independence.
Selection of Peer Group - The Committee selects peer group companies for compensation comparison purposes with guidance from the
independent compensation consultant and input and discussion with management. There is ongoing discussion about whether the mix of companies
in the peer group produces a valid competitive analysis relative to our talent requirements both in the United States and abroad. The peer group is
chosen annually by considering our competitors, the IT industry, other distributors, companies with circumstances similar to ours (such as operating
income percentages, low operating margins, and global operations), and companies with whom we compete for employee talent. The peer group
selected for fiscal 2013 consisted of the following 22 companies (the “Selected Companies Peer Group”):
*Brightpoint, Inc. has since been acquired by Ingram Micro Inc.
Based on publicly available information, revenue for these companies ranged from $3.59 billion to $96.41 billion, with the 50
th
percentile at $12.05
billion. Operating income margins ranged from 0.33 percent to 11.52 percent, with the 50
th
percentile at 3.90 percent.
In addition to the Selected Companies Peer Group, the Committee also considered pay data from two broader general industry subgroups of
companies representing a cross-section of manufacturing and services industries. The first such subgroup consisted of 172 companies with publicly
reported revenues between $10 billion and $50 billion, and median revenues of $16.5 billion. The
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Anixter International Inc. Nash Finch Company
Arrow Electronics, Inc. Office Depot, Inc.
AutoNation, Inc. Rite Aid Corporation
Avnet, Inc. Safeway Inc.
Best Buy Co., Inc. Staples, Inc.
Brightpoint, Inc.* Supervalu Inc.
CVS Caremark Corporation Synnex Corporation
Core-Mark Holding Company, Inc. Sysco Corporation
Genuine Parts Company United Stationers Inc.
Ingram Micro Inc. Wesco International, Inc.
Insight Enterprises, Inc. W.W. Grainger, Inc.