Neiman Marcus 2007 Annual Report Download - page 57

Table of Contents
How Executive Direct Compensation is Determined
To assure the continued growth and profitability of the Company, we reward performance that is measurable against
performance targets established in our compensation program 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.
• Role of the Compensation Committee
The Compensation Committee is responsible for determining the compensation of our named executive officers. The
Compensation Committee considers input from our CEO, our Senior Vice President and Chief Human Resource Officer, and
compensation consultants in making determinations regarding our executive compensation program and the individual contribution of
our executive officers to the Company. The CEO does not play a role in his own compensation determinations other than discussing
individual performance objectives. The CEO's performance assessment and compensation are reviewed and determined solely by the
Compensation Committee.
• Role of Management
As part of our annual planning process, our CEO and our Senior Vice President and Chief Human Resource Officer, with the
help of our consultants, develop and recommend a compensation program for all executive officers. Based on a performance
assessment, the CEO and the Senior Vice President and Chief Human Resource Officer attend a meeting of the Compensation
Committee held for the purpose of considering the executives' annual compensation, and recommend the base salary, incentive bonus
awards, long-term incentive awards, if applicable, for each of the other executive officers, including the named executive officers.
The other named executive officers do not play a role in their own compensation determination other than discussing individual
performance objectives with the CEO.
• Role of Compensation Consultants
With the approval of the Compensation Committee, management retained compensation consultants in fiscal year 2008 to
advise the Company on executive compensation matters. They provide information about industry compensation practices and
competitive levels at a group of industry related companies, and recommend compensation programs and approaches that are
consistent with our compensation policies. This assistance also includes providing relevant market data and alternatives to consider in
designing the compensation packages for each of the named executive officers and assisting in the preparation of individual total
compensation summaries. The Compensation Committee considers the advice of the compensation consultants to assist us in
evaluating our compensation policies. The Compensation Committee also considers advice from various other consultants regarding
plan design, and recommendations involving benefits plans such as our Key Employee Deferred Compensation Plan and the
Supplemental Executive Retirement Plan discussed later in this section. These consultants also provide advice on matters relating to
broad-based employee healthcare and benefit programs and related employee communications. These plans cover the named
executive officers as well as other eligible employees.
• Market Comparisons
The Compensation Committee and management request information from the compensation consultants to determine if any
element of compensation needs adjustment in order to comply with our strategy of targeting executive compensation that is between
the 50th and 75th percentile levels of the compensation packages received by executives at a group of industry related companies.
In fiscal year 2008, the Compensation Committee, on the recommendation of the consultants, referred primarily to the 16
companies identified below for purposes of benchmarking the compensation of our named executive officers. These companies are
intended to represent our competitors for business and talent. Their executive compensation programs are compared to ours, as well
as the compensation of individual executives if the jobs are sufficiently similar to make the comparison meaningful. The comparison
data is used to ensure that the compensation for our named executive officers, both individually and as a whole, is appropriately
competitive relative to our Company's performance.
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