CompUSA 2009 Annual Report Download - page 25

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22
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
In this section, we discuss the material elements of our compensation programs and policies, including the objectives of our
compensation programs and the reasons why we pay each element of our executives’ compensation. Following this discussion, you
will find a series of tables containing more specific details about the compensation earned by, or awarded to, the following individuals,
whom we refer to as the Named Executive Officers or NEOs. This discussion focuses on compensation practices relating to the NEO’s
for our 2009 fiscal year.
Our NEO’ s in 2009 (based on total 2009 compensation earned) were as follows:
Richard Leeds Chairman; Chief Executive Officer
Bruce Leeds Vice Chairman
Robert Leeds Vice Chairman
Gilbert Fiorentino Chief Executive - Technology Products Group
Lawrence Reinhold Executive Vice President; Chief Financial Officer
Central Objectives and Philosophy of Our Executive Compensation Programs
The Company’ s executive compensation programs are designed to achieve a number of important objectives, including attracting
and retaining individuals of superior ability and managerial talent, rewarding individual contributions to the achievement of the
Company’ s short and long-term financial and business objectives, promoting integrity and good corporate governance, and motivating
our executive officers to manage the Company in a manner that will enhance its growth and financial performance for the benefit of our
stockholders, customers and employees. Accordingly, in determining the amount and mix of compensation, the Compensation
Committee seeks both to provide a competitive compensation package and to structure annual and long-term incentive programs that
reward achievement of performance goals that directly correlate to the enhancement of sustained, long-term shareholder value, as well
as to promote executive retention.
Our Compensation Committee seeks to design compensation programs with features that mitigate risk without diminishing the
incentive nature of the compensation. The Company’ s variable pay programs are designed to reward outstanding individual and team
performance while mitigating risk taking behavior that might affect financial results. We believe our programs encourage and reward
prudent business judgment and appropriate risk-taking over the long term. We believe the following factors are effective in mitigating
risk relating to our compensation programs:
• Multiple Performance factors: We use multiple performance factors that encourage executives to focus on the overall health
of the business rather than a single financial measure.
• Award Cap. Our 2009 NEO Cash Bonus Plan and our 2010 NEO Cash Bonus Plan (both discussed below) cap the maximum
award payable to any individual.
• Clawback Provision. The Company’ s 2010 NEO Cash Bonus Plan provides the Company the ability to recapture all or a
portion of cash awards (i) from our executive officers to the extent a bonus resulted from reported financial results that upon
restatement of such results (other than as a result of changes in accounting principles) would not have generated the bonus or
would have generated a lower bonus or (ii)from an executive officer if the Board learns of any misconduct by the executive
officer that contributed to the Company having to restate all or a portion of its financial statements. In addition, the Board
may recapture cash bonus awards from an executive if the Board determines that the executive engaged in serious ethical
misconduct.
• Management Processes. Board and management processes are in place to oversee risk associated with the Company’ s
operations. Our Board as a whole is responsible for overseeing the Company’ s risk management process. The Board focuses
on the Company’ s general risk management strategy, the most significant risks facing the Company, and seeks to ensure that
appropriate risk mitigation strategies are implemented by management. The Company has recently enhanced its risk
management processes, and risk management will be a recurring Audit Committee and Board quarterly agenda item, and is
considered part of strategic planning. The Board is also apprised of particular risk management matters in connection with its