Neiman Marcus 2006 Annual Report Download - page 60
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ITEM 11. EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The following is meant to provide a clear and concise analysis of the compensation elements, arrangements, and decisions we
made in fiscal year 2007 for our executive officers named in the Summary Compensation Table that follows this section.
Overview
Compensation Philosophy and Objectives
We are a premier luxury retailer that has been in business for 100 years. Our continued success depends on the skills of
talented leaders who are dedicated to achieving solid financial performance, providing outstanding service to customers, and
managing the Company's assets wisely. Our compensation program is designed to meet the following objectives:
1. To recruit and retain executives who possess the exceptional ability, experience, and vision to sustain and promote our
preeminence in the marketplace.
2. To encourage and reward the achievement of our short- and long-term goals and operating plans.
3. To encourage and reward increasing customer satisfaction, improving customer service, providing our customers with
the high-end luxury merchandise they have come to expect, and increasing the amount of business our customers do with
us.
4. To align the interests of our executives with the financial and strategic objectives of our equity investors.
5. To provide total compensation opportunities that meet the expectations of a highly skilled executive team, are aligned
and consistent with our fundamental performance and are competitive with the compensation practices and levels offered
by companies with whom we compete for talent.
The following are the primary direct and indirect compensation elements that make up our executive compensation program:
Direct:
• Base salary
• Annual Bonus
• Long-term incentive through an initial stock option awarded in fiscal year 2006 and a cash incentive plan.
Indirect:
• Health and welfare benefits
• Retirement benefits
• Life insurance
• Deferred compensation program
• Certain perquisites
The discussion below elaborates on these primary elements, illustrates how they have operated in practice in determining the
compensation of our named executive officers, and describes certain of the material compensation processes, policies and practices
that we have adopted.
What our compensation program is designed to reward
To assure the continued growth and profitability of the Company, we reward performance that is measurable against
performance targets established in our compensation program and that are based on annual and longer term performance objectives
approved by the Board of Directors. Achievement of these performance targets will result in our annual and longer term growth and
profitability and will also support the financial and strategic objectives of our equity investors.