Travelzoo 2010 Annual Report Download - page 9

Personal Interest
Mr. Loughlin is the Chief Executive Officer of the Company.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE
STOCK OPTION AGREEMENT.
ADVISORY VOTE ON EXECUTIVE COMPENSATION (PROPOSAL 3)
Recently enacted federal legislation (Section 14A of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) requires that we include in this Proxy Statement a non-binding stockholder vote on our executive
compensation as described in this Proxy Statement (commonly referred to as “Say-on-Pay”) and a non-binding
stockholder vote to advise on whether the frequency of the Say-on-Pay vote should occur every one, two or three
years.
We encourage stockholders to review the Compensation Discussion and Analysis section beginning on
page 11. Our executive compensation program has been designed to pay for performance and align our
compensation programs with business strategies focused on long-term growth and creating value for
stockholders while also paying competitively and focusing on the total compensation perspective. We feel this
design is evidenced by the following:
• We provide a significant portion of our total compensation in the form of performance-based compensation;
for example, approximately 17% to 42% of our named executive officers’ total compensation for 2010 was
in the form of performance-based compensation based on the achievement of quarterly corporate financial
measures such as revenue, operating income and the number of subscribers to the Company’s publications.
The Board of Directors strongly endorses the Company’s executive compensation program and recommends
that stockholders vote in favor of the following resolution:
RESOLVED, that the stockholders approve the compensation of our named executive officers, as
disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation
Discussion and Analysis and the tabular and narrative disclosure in the Company’s proxy statement for
its 2011 Annual Meeting of Stockholders.
Because the vote is advisory, it will not be binding upon the Board of Directors or the Compensation
Committee and neither the Board of Directors nor the Compensation Committee will be required to take any action
as a result of the outcome of the vote on this proposal. The Compensation Committee will consider the outcome of
the vote when considering future executive compensation arrangements.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THIS PROPOSAL.
ADVISORY VOTE ON FREQUENCY OF ADVISORY VOTE ON EXECUTIVE COMPENSATION
(PROPOSAL 4)
As mentioned above, recently enacted legislation requires that we include in this Proxy Statement a separate
non-binding shareholder vote to advise on whether the frequency of the Say-on-Pay vote should occur every one,
two or three years. You have the option to vote for any one of the three options, or to abstain on the matter.
The Board of Directors has determined that an annual advisory vote on executive compensation is the best
approach for the Company. In formulating its recommendation, the Board of Directors considered that an annual
advisory vote on executive compensation will allow stockholders to provide direct input on the Company’s
compensation philosophy, policies and practices every year. Additionally, an annual advisory vote on executive
compensation is consistent with the Company’s policy of seeking input from, and engaging in discussions with, its
stockholders on executive compensation and corporate governance matters.
The option receiving the greatest number of votes (every one, two or three years) will be considered the frequency
approved by stockholders. Although the vote is non-binding, the Board of Directors will take into account the outcome of
the vote when making future decisions about the frequency for holding an advisory vote on executive compensation.
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