Neiman Marcus 2008 Annual Report Download - page 60

Table of Contents
The base salaries of all salaried employees, including the named executive officers, earning $200,000 and above were reduced by four
percent. The following table reflects the original base salary increases approved by the Compensation Committee for the named
executive officers on September 16, 2008, the percentage increase over the prior year, and the adjusted salaries following
implementation of the Company-wide salary reduction plan.
Name
FY 2008
Base Salary
($)
Percentage
Increase
(%)
FY 2009
Base Salary
($)
Adjusted FY 2009
Base Salary
($)
Burton M. Tansky 1,500,000 4.0 1,560,000 1,497,600
Karen W. Katz 875,000 6.8 935,000 897,600
James E. Skinner 625,000 4.8 655,000 628,800
James J. Gold 490,000 6.1 520,000 499,200
Gerald A. Barnes (1) 360,500 3.0 371,500 356,600
Footnotes:
(1) In April 2009, Gerald Barnes was promoted to his current position and his annual base salary increased to $425,000.
For all named executive officers, the original base salary increases reflect merit increases and adjustments relative to
competitive market benchmarks as discussed above. Information on amounts actually earned by the named executive officers in fiscal
years 2007, 2008, and 2009 can be found in the Summary Compensation Table on page 60 of this section.
Annual Incentive Bonus. In determining annual incentive bonus amounts for the named executive officers, the Compensation
Committee considers the performance relative to the pre-established goals that are set at the beginning of the year. For fiscal year
2009, our annual financial goals were based on Adjusted EBITDA, return on invested capital (ROIC), or inventory turnover
performance as described more fully on page 57. The attainment of certain predetermined individual performance goals for each of
the named executive officers is also a key component in the amount of incentive bonus each will receive. The individual performance
objectives are project oriented and change from year to year. The Committee sets the threshold, target, and maximum performance
targets at levels they believe are challenging based on historical company performance and industry and market conditions. Goals are
established at the division and business unit levels where appropriate for each of the named executive officers. As it relates to our
annual incentive compensation program in particular, this performance assessment is a key determinant in total compensation paid to
our named executive officers. Fiscal year 2009 target annual incentives and relative performance weightings for the named executive
officers were as follows:
Target Bonus
As Percent of Relative Performance Weighting
Name Salary Company Division Individual
Burton M. Tansky 100% 75% — 25%
Karen W. Katz 75% 30% 50% 20%
James E. Skinner 65% 75% — 25%
James J. Gold 60% 30% 50% 20%
Gerald A. Barnes (1) 60% 30% 50% 20%
Footnotes:
(1) The threshold, target, and maximum award levels were based on Mr. Barnes' salary level subsequent to his promotion.
Mr. Tansky, the individual with the greatest overall responsibility for company performance, was granted a larger incentive
opportunity in comparison to his base salary in order to weight his annual cash compensation mix more heavily towards performance-
based compensation. For each of the named executive officers, the Compensation Committee deemed their potential impact on
company results as equally significant.
Corporate Performance Targets. At the end of the fiscal year, the Compensation Committee evaluates Company
performance against specific financial and strategic performance targets set at the beginning of the fiscal year. For fiscal year 2009,
the bonus metrics and weightings for Messrs. Tansky and Skinner were based on overall Adjusted EBITDA and ROIC; for Ms. Katz ,
overall Adjusted EBITDA and ROIC and Adjusted EBITDA and Inventory Turnover at Neiman Marcus Stores; for Mr. Gold,
Adjusted EBITDA and Inventory Turnover at Bergdorf Goodman, and for Mr. Barnes, Adjusted EBITDA and Inventory Turnover at
Neiman Marcus Direct. The bonus metrics were based on the following financial goals:
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