Dell 2006 Annual Report Download - page 129

Table of Contents
• Reviewing with management and approving all forms of compensation to be provided to the executive officers, including
establishing target opportunity levels, setting performance goals, and determining results;
• Acting as administrator of our compensation plans, including granting awards to executive officers; and
• Evaluating the need for, and provisions of, employment contracts or severance arrangements for the executive officers.
The Leadership Development and Compensation Committee has delegated its authority with respect to compensation
decisions for non-executive officer employees to the Chairman and Chief Executive Officer, subject to periodic review by the
committee. The sections presented will follow in the order of the duties listed above.
Executive Compensation Philosophy and Core Objectives
We seek profitable revenue growth in a highly competitive industry that includes several other large branded competitors as
well as a number of smaller branded and generic competitors. Our business strategy is evolving as we combine our direct
customer model with relevant technologies and solutions, highly efficient manufacturing and logistics, and new distribution
channels to reach commercial customers and individual consumers around the world. Accordingly, the Board and the Chief
Executive Officer have defined the following four multi-year strategic corporate priorities:
• Globalization — Focus on accelerating profitable revenue growth in developing areas of the world;
• Product Leadership — Design and innovate around non-proprietary standards-based technologies to offer customers what
they want, when they want it, and at a level of value they consider to be unparalleled;
• Customer Experience — Focus on product quality and customer service to instill customer satisfaction, trust, and
loyalty; and
• Winning Culture — Recruit and develop a diverse workforce globally and provide a positive work environment, including
recognition based on merit, a focus on customer commitment, the highest standards of integrity and ethical behavior, and
community leadership.
The Leadership Development and Compensation Committee is committed to and responsible for designing, implementing,
and administering a compensation program for executive officers that ensures appropriate linkage between pay, company
performance, and results for shareholders. The committee seeks to increase shareholder value by rewarding performance
with cost-effective compensation and ensuring that we can attract and retain the best executive talent through adherence to
the following core compensation objectives:
• Providing compensation commensurate with the level of success achieved, ranging from above-average overall rewards for
performance that exceeds that of our peers to below-average compensation for below-average performance;
• Providing a total compensation opportunity that is competitive with similar high-tech and other large global general industry
companies that we compete with for talent;
• Managing fixed costs by combining a conservative approach to base salaries and benefits, with more aggressive
performance-dependent short- and long-term incentives;
• Recognizing and rewarding the achievement of corporate, regional/business unit, and individual performance goals; and
• Heavily weighting the compensation package towards long-term, performance-dependent incentives to better align the
interests of executives with shareholders.
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