Ingram Micro 2007 Annual Report Download - page 23

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COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
In this section we provide a discussion and analysis of the material elements of the compensation provided to
our Chief Executive Officer and the five other executive officers named in the Summary Compensation Table (the
“Named Executive Officers” or “NEOs”). The purpose of this discussion is to provide the context for the specific
compensation amounts and arrangements paid and provided to our NEOs, as described in the tables and narratives
following this discussion and analysis.
Objectives of the Compensation Programs
The Company operates in the extremely competitive, rapidly changing, and low-margin high-technology
distribution and service industry. We believe that the compensation programs for our executive officers are designed
to attract, motivate, and retain talented executives necessary for our long-term success. The programs are designed
within a framework based on the achievement of pre-established financial targets and alignment of the financial
interests of our executive officers with those of our shareholders by providing appropriate short- and long-term
financial incentives that reward executives for achieving objectives that enhance shareholder value. The broad
objectives of the executive compensation program established by the Company and approved by the Human
Resources Committee of our Board of Directors (the “Committee”) are to:
• Attract, motivate, and retain executive talent in a highly competitive business environment.
• Reward executives for Company performance that contributes to growth in shareholder value.
• Encourage and reward both profitable growth and operating efficiency.
• Provide conservative levels of nonperformance-based compensation, especially in benefits and perquisites.
• Target executive compensation at the market median (50
th
percentile) for each element of pay and in total,
allowing officer compensation to vary based on individual and Company performance.
• Link the financial interests of executive management with those of the shareholders by prudently controlling
the use of Company stock in order to limit the dilution of shareholder interests.
• Deliver executive compensation in a tax-efficient and cost-effective manner.
Overall Design and Elements of the Executive Compensation Program
The compensation programs for our executive officers consist of:
• Base Salary
• Annual performance-based cash incentives
• Annual long-term equity grants
• Stock Options
• Performance-vesting restricted stock units (RSUs)
• Benefits and perquisites
We believe this multi-component approach best serves the interest of the Company and its shareholders. We
generally target total compensation at the 50th percentile of our selected peer group while aligning NEO
compensation with our shareholders’ interests, in addition to considering other factors, as described below. We
seek to encourage and reward both profitable growth and operational efficiency. Our incentive plans have goals
intended to support these objectives.
A high proportion of our NEO’s current compensation is “at risk” and subject to the financial performance of
the Company. The only guaranteed forms of NEO compensation are base salaries and benefit programs that are
generally available to all management associates and modest perquisites. The remainder of compensation must be
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