WeightWatchers 2002 Annual Report Download - page 39

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•to monitor performance and compensation of our employee-director, officers and other key
employees;
•to prepare recommendations and periodic reports to the board of directors concerning these
matters; and
•to function as the committee which administers the incentive programs referred to in ‘‘Executive
Compensation’’ below.
Compensation and Benefits Committee Interlocks and Insider Participation
None of our executive officers has served as a director or member of the compensation and
benefits committee, or other committee serving an equivalent function, of any entity of which an
executive officer is expected to serve as a member of our compensation and benefits committee.
Board of Directors Report on Executive Compensation Programs
Our board of directors oversees our compensation programs with particular attention to the
compensation of our Chief Executive Officer and other executive officers. It is the responsibility of the
board of directors to review, recommend and approve changes to our compensation policies and
benefits programs, to administer our stock plans, including approving stock option grants to executive
officers and other stock option grants, and to otherwise ensure that our compensation philosophy is
consistent with our best interests and is properly implemented.
Our compensation philosophy is to (1) provide a competitive total compensation package that
enables us to attract and retain key executive and employee talent needed to accomplish our goals, and
(2) directly link compensation to improvements in our financial and operational performance.
Total compensation is comprised of a base salary plus both cash and non-cash incentive
compensation, and is based on our financial performance and other factors, and is delivered through a
combination of cash and equity-based awards. This approach results in overall compensation levels
which follow our financial performance.
Our board of directors reviews each senior executive officer’s base salary annually. In determining
appropriate base salary levels, consideration is given to the officer’s impact level, scope of
responsibility, prior experience, past accomplishments and data on prevailing compensation levels in
relevant executive labor markets.
Our board of directors believes that granting stock options provides officers with a strong
economic interest in maximizing shareholder returns over the longer term. We believe that the practice
of granting stock options is important in retaining and recruiting the key talent necessary at all
employee levels to ensure our continued success.
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive
officers and holders of more than 10% of our common stock (collectively, ‘‘Reporting Persons’’) to file
with the Securities and Exchange Commission initial reports of ownership and reports of changes in
ownership of our common stock. Such persons are required by regulations of the Securities and
Exchange Commission to furnish us with copies of all such filings. Based on our review of the copies of
such filings received by us with respect to the fiscal year ended December 28, 2002 and written
representations from certain Reporting Persons, we believe that all Reporting Persons complied with all
Section 16(a) filing requirements in the fiscal year ended December 28, 2002.
32