Best Buy 2009 Annual Report Download - page 60

What is your long-term incentive compensation long-term ownership stake in our success. Including
philosophy? store managers in our long-term incentive program
helps us ensure that they will act as owners and share in
As a company, we believe the contributions provided by our long-term success as owners. In fact, if you consider
each employee, both individually and as part of a team, grants made during our most recent fiscal year, over
are key to our long-term success. Over our history, we 90% of the recipients of long-term incentives were
have faced a series of challenges. The outcomes of non-officers.
these challenges have contributed to our growth and to
our view of the role of long-term incentive compensation While we reward a broad base of employees, we also
as a vehicle to help us overcome the challenges and to believe that equity-based compensation is a key
share in the success of our growth. In a company such component in well-designed executive compensation.
as ours, where the growth trajectory can be uneven, Part of our long-term compensation philosophy is
innovation is the key ingredient of our ability to achieve designed to ensure that those who perform strategic
our vision and mission. Historically, innovation has policy-making functions, and have greater
originated from many sources within our company — responsibilities and accountability for the organization’s
many of which are not top-level management. financial success, have an ownership interest in the
Innovative employees are not always the most highly organization. Furthermore, when recruiting executive
compensated, but they typically feel a personal stake in talent from external sources, we believe the leverage
making Best Buy a success. As we focus increasing provided by equity-based compensation is an integral
attention on individual customer needs and aspirations, part of aligning the new executives’ interests with the
our conviction has grown that we excel in meeting the interests of our shareholders.
unique needs of our customers whenever we unleash Why are you requesting additional shares under the
the potential of all of our employees. Omnibus Plan now?
We use equity-based long-term incentives as one tool in We believe that our equity-based incentive programs
inspiring our people, encouraging innovation and and our emphasis on employee stock ownership have
unleashing the individual talents of our employees. been integral to our success in the past and are crucial
These incentives are in alignment with our Total Rewards to our ability to retain, recruit and motivate participants
Philosophy, which balances our strategy with cost and to achieve our corporate performance goals in the years
with what employees value. We believe that equity- ahead. Over the past year, economic and competitive
based compensation can be highly effective in building conditions have combined to create new challenges and
an employee’s personal stake in our success. Therefore, opportunities that will shape our future. In the past nine
we have designed several programs, such as our months, the Compensation and Human Resources
Retirement Savings Plan, Employee Stock Purchase Plan, Committee, in consultation with management, decided
Chairman’s Discretionary program and our Innovation to build the equity leverage of our employees and bind
Award program, to include equity components that their personal lives and aspirations more tightly to our
continually reinforce the connections among our future opportunities. In August 2008, we launched an
employees, customers and shareholders. Using equity- ambitious performance-based restricted stock unit
based compensation for a portion of total compensation incentive for 20 instrumental leaders. The incentive used
aligns the dreams and aspirations of our employees and 2.4 million of the shares of common stock available for
their families with our shareholders’ interests. grant under our Omnibus Plan. The aggressive
In general, we have provided long-term incentives to a performance targets for these incentives were designed
broader range of employees than most other large to require a near doubling in the size of our company,
corporations have done. For example, our store and significant increases to our profitability, by the end
managers receive long-term incentives to create a of March 2012, for vesting to occur. We believed these
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