Ingram Micro 2007 Annual Report Download - page 26

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These companies had the following median scope measures:
2006 Comparator Group (189 companies) ($ in millions)
Comparator Group Ingram Micro
# of Employees ...................................... 40,275 13,000
Sales .............................................. $11,550 $28,808
Net Income . ........................................ $ 805 $ 217
Market Cap . ........................................ $12,890 $ 3,390
The compensation report examined the competitiveness of Ingram Micro’s executive compensation programs
in total and by each element of compensation (base pay, annual incentives, and long-term incentives). In doing so,
generally, the Committee compared the value of each of Ingram Micro’s executive’s compensation elements against
the median information available from the defined comparator group. The Committee generally targeted the
50th percentile of the median information available from the defined comparator group, and used this information
as one of the factors in making compensation determinations. Benefits and perquisites were not included in the 2006
or 2007 reports as they represent an insignificant portion of our executive officer’s total remuneration.
Elements of Compensation
The main elements of executive officer compensation are annual base salary, annual bonus and long-term
equity-based incentives. The mix and proportion of these elements to total pay is benchmarked annually against the
comparator group of companies for each NEO. The Committee, at its sole discretion, may make changes to the mix
or relative weighting of each element based on benchmarking results or recommendations received from its
independent outside advisor. The Committee reviews the total pay package of each NEO and takes into consid-
eration the impact a change in one element may have on other elements and total pay. The following table illustrates
these components, their objectives, and the form of payment:
Component Objectives and Basis Form of Payment
Base Salary Provide competitive levels of base
salary for each NEO based on
their role and responsibilities
within the Company. Used to
attract and retain executive talent
in a very competitive marketplace.
Cash paid monthly or bi-weekly
depending on the NEO’s country
of residence and payroll
procedures
Annual Executive Incentive
Award Program
Focus NEOs on the attainment of
the Company’s annual operating
plan. Metrics of pretax profit and
working capital days or economic
profit are designed to encourage
both profitability and the efficient
use of capital, thus improving
shareholder value.
Annual cash payment following
the public release of the
Company’s annual financial results
and review and approval by the
Committee. Payment subject to the
attainment of predetermined
financial objectives.
Equity-Based Long-Term
Incentive Award Programs
Focus NEOs on the attainment of
the Company’s long-term
objectives. Metrics of earnings per
share growth rate and return on
invested capital and targets based
on the Company’s three-year
strategic plan are designed to
increase shareholder value and
retain executive talent.
Annual grants of stock options and
performance-vested restricted
stock units. Stock options vest
over a three-year period and
provide value only if the
Company’s stock increases in
value. Restrictions lapse (vest) on
restricted stock units only if
predetermined financial objectives
are achieved following the close
of a three-year performance
measurement period and review
and approval by the Committee.
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