Best Buy 2010 Annual Report Download - page 41

duties and scope of responsibility, his short-term and maximum payout percentages for each brand are
incentive and LTIP opportunities were revised as follows:
accordingly.
Target Payout Percentage — Wheway
Mr. Wheway’s appointment as Chief Executive
Officer — Best Buy Europe was subject to the approval Brand
Best Buy Payout as a
of the Best Buy-appointed directors of the Best Buy U.K. CPW % of Salary
Europe board of directors pursuant to the terms of the
Target 50% +50% =100%
Shareholders Agreement between The Carphone
Maximum 100% +100% =200%
Warehouse Group PLC and us, dated June 30, 2008,
which governs the operations of Best Buy Europe. The The metrics for each brand were determined by
Best Buy-appointed directors on the Best Buy Europe identifying which key performance indicators are the
board, with the approval of the Compensation most relevant and most strongly correlated to the overall
Committee and after taking into consideration the business strategy of each brand. Both brands include
recommendation of the full Best Buy Europe board, customer-focused, employee-focused and financial
have the authority under such agreement to select, metrics in order to incent a balanced approach to
terminate and set the compensation of the Chief running the business. In addition, each brand’s metrics
Executive Officer — Best Buy Europe. include a metric from the other brand to ensure
leverage across both brands.
Upon becoming Chief Executive Officer — Best Buy
Europe, Mr. Wheway became eligible for a The Best Buy U.K. brand metrics include opening plan,
performance-based, short-term incentive award payable profit, cash (capital expenditures per store), employee
in cash and expressed as a target payout percentage of engagement and earnings before interest and taxes
his base salary. Mr. Wheway’s target payout percentage (‘‘EBIT’’) metrics. Metrics for the Best Best U.K. brand
for fiscal 2010 was 100%, which matches the incentive during fiscal 2010 were created with the anticipation
opportunity of his direct reports. There is no minimum that the brand would be in initial stages of store
guaranteed payout under the applicable short-term opening during the year and are gauged accordingly.
incentive award program, and Mr. Wheway’s maximum These metrics have weights ranging between 15% and
incentive payout is 200%. 40%. The CPW brand metrics include EBIT, customer
satisfaction, customer complaint run rate, cash flow,
Mr. Wheway’s short-term incentive was tailored to align
employee engagement, trading margin, post pay
his compensation with his responsibility for the primary
connections, and opening plan (a cross-over metric
retail brands housed in Best Buy Europe. The
from the Best Buy U.K. brand). These metrics have
performance metrics of the incentive are split evenly
weights ranging between 5% and 7.5%, except for EBIT
between (i) the Best Buy retail operations in the U.K.
which is weighted at 50%. We believe disclosure of the
(‘‘Best Buy U.K.’’) and (ii) The Carphone Warehouse
specific metric target amounts and actual performance
(including The Phone House) retail operations across
against the targets would cause us material competitive
Europe (‘‘CPW’’). The break-out of Mr. Wheway’s target
harm and, therefore, have not included such disclosure
in this Proxy Statement.
In March 2010, the Compensation Committee
approved a payment of 80% of Mr. Wheway’s expected
short-term incentive payout. This payment was
comprised of a prorated 17% expected payout under
the International Leadership STIP of £51,861 ($83,849
using the average exchange rate from May 2009
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