CDW 2012 Annual Report Download - page 116

Table of Contents
Consistent with the Company's pay-for-performance philosophy and executive compensation program objectives, adjustments to
executive compensation levels have historically been based on individual and Company performance with reference to the compensation levels
paid to similarly situated executive officers at the Company, as well as market data to provide a perspective on external practices.
Market Comparisons
The Committee considers relevant market pay practices when establishing and evaluating executive compensation. In conjunction with
market data, the Committee also considers the executive's overall responsibilities, individual performance against Company goals and leadership
impact when establishing appropriate compensation levels.
To obtain a broad view of competitive practices among industry peers and competitors for executive talent, the Committee reviews
market data for peer group companies as well as general industry and technology company surveys. Each of the companies in the Company's
2012 peer group met one or more of the following criteria: (i) operated in the same line of business as the Company; (ii) operated “close” to the
Company's line of business; (iii) operated in a business-to-business distribution environment; or (iv) competed with the Company for talent. The
2012 peer group consisted of the following companies, which were the same companies that were used to evaluate 2011 compensation:
Aon Hewitt provides competitive data for the peer group utilizing peer group proxy data and its general industry database for the CEO
and CFO. For the Senior Vice President, Chief Marketing Officer and Senior Vice President, Corporate Sales for which sufficient peer group
data was not available, Aon Hewitt provided revenue size-adjusted competitive data from its general industry database.
In reviewing the compensation levels set for each Named Executive Officer, the Committee supplements the Aon Hewitt peer group
data with data taken from technology industry surveys prepared by Radford, a leading provider of compensation market data. While the Radford
surveys include information regarding over 1,000 companies, the Committee's use of the surveys was limited to a review of U.S. compensation
data derived from technology companies in the surveys that had annual revenues in excess of $3.0 billion. The Committee also reviewed,
depending on the availability of data within the Radford surveys for the position being considered, market data derived from between 16 and 31
of the technology companies included in the surveys, which companies had median annual revenues of between $5.2 billion and $9.2 billion. In
reviewing the size-adjusted data from the Aon Hewitt general industry database and the Radford database, the Committee does not review the
specific companies included in the databases.
For Mr. Richards, the peer group was the primary market data source for evaluating 2012 base salary and annual cash incentive award
opportunity, given the availability of chief executive officer compensation data in public filings, with the compensation survey data providing a
supplemental viewpoint. For the other Named Executive Officers other than Mr. Edwardson, the Committee reviewed blended market data when
evaluating the 2012 base salary and annual cash incentive awards, with the peer group data and compensation survey data weighted equally. The
Committee did not undertake a 2012 market review of Mr. Edwardson's compensation as his compensation levels were set pursuant to the terms
of his 2011 employment agreement. For purposes of this Compensation Discussion and Analysis, the peer group data and compensation survey
data are collectively referred to as “market data.”
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• Directly align executive compensation elements with both short-term and long-
term Company performance;
•
Align the interests of our executives with those of our stakeholders; and
•
Maximize the efficiency of the program from a tax, accounting, cash flow and share dilution perspective.
Anixter International, Inc. Office Depot, Inc.
Arrow Electronics, Inc. OfficeMax Incorporated
Avaya Inc. PC Connection Inc.
Best Buy Co., Inc. RadioShack Corporation
C. R. Bard, Inc. Staples, Inc.
GTSI Corp. Tech Data Corporation
Illinois Tool Works Inc. United Stationers Inc.
Ingram Micro Inc. W.W. Grainger, Inc.
Insight Enterprises, Inc. Wesco International, Inc.
NCR Corporation