CDW 2012 Annual Report Download - page 117

Table of Contents
In determining Mr. Richards' 2012 long-term incentive award, the Committee took into consideration Mr. Richards' successful
performance since assuming the position of Chief Executive Officer, the fact that Mr. Richards did not receive an additional long-term incentive
award at the time he assumed the position of Chief Executive Officer as well as long-term incentive compensation market data compiled by the
Committee's independent compensation consultant, Frederic W. Cook & Co (the “Compensation Consultant”). For purposes of Mr. Richards'
2012 long-term incentive award, the Committee did not view publicly traded peer group long-term incentive grant practices as being relevant at
the time given the Company's private equity ownership and illiquid stock. Therefore, the Compensation Consultant's study did not focus on the
grant date value of long-term incentive awards among peers, but rather focused on the potential ownership opportunities ( i.e. , carried interest
levels, expressed as both a percentage ownership in the company as well as a dollar value) for chief executive officers at companies with private
equity ownership that recently became publicly listed through an initial public offering. The peer group used for this purpose consisted of the
following companies:
Since the Acquisition, the Company has continued to utilize the peer group established prior to the Acquisition. As our business model
has evolved following the Acquisition to that of a multi-brand technology solutions provider, in 2012, the Committee felt it appropriate to
perform a holistic review of the Company's historical peer group with the assistance of the Compensation Consultant. Based on this review, the
Committee approved changes to the Company's current peer group selection criteria to include companies that met one or more of the following
criteria: (i) similar size in terms of revenue and/or enterprise value (one-third to three times the Company's revenue or enterprise value); (ii)
operates in a business-to-business distribution environment; (iii) members of the technology industry; (iv) similar customers ( i.e. , business,
government, healthcare, and education); (v) companies that provide services and/or solutions; and (vi) similar EBITDA and gross margins. As a
result, the Committee approved the peer group set forth below to be used for 2013 compensation decisions. Based on data compiled by the
Compensation Consultant at the time of the peer group review, our revenues and EBITDA were between the median and 75
th
percentile of the
revised peer group.
The following companies were deleted from the Company's peer group due to differences in size and/or differences in business model:
Avaya Inc.; Best Buy Co., Inc.; C.R. Bard, Inc., GTSI Corp.; Illinois Tool Works, Inc.; Ingram Micro Inc.; NCR Corporation; Office Depot,
Inc.; OfficeMax Incorporated; PC Connection Inc.; RadioShack Corporation; Staples, Inc. and Tech Data Corporation.
Independent Compensation Consultant
As noted above, Frederic W. Cook & Co. was retained by the Committee in 2012 to advise on executive compensation matters. The
Compensation Consultant did not provide any additional services to the Company in 2012.
Role of Executive Officers
The Committee is responsible for all compensation decisions for our Named Executive Officers. Mr. Richards reviewed the
performance of each executive officer and, based on these reviews, made recommendations to the Committee with respect to 2012
compensation.
105
Air Lease Corporation Kayak Software Corporation
Allison Transmission Holdings, Inc. MRC Global Inc.
Dunkin' Brands Group, Inc. Nielsen Holdings N.V.
Freescale Semiconductor, Ltd. Vantiv, Inc.
GNC Holdings, Inc. Wesco Aircraft Holdings, Inc.
HCA Holdings, Inc.
Accenture plc* Insight Enterprises, Inc.
Anixter International, Inc. Owens & Minor, Inc.*
Arrow Electronics, Inc. Patterson Companies, Inc.*
Avnet, Inc.* SYNNEX Corporation*
CGI Group Inc.* United Stationers Inc.
Genuine Parts Company* W.W. Graingers, Inc.
Henry Schein, Inc.* Wesco International, Inc.
*Companies added to the Company's peer group.