Overstock.com 2003 Annual Report Download - page 41

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evaluating management's performance,
reviewing and approving the Company's compensation philosophy,
reviewing and approving all executive officers' compensation, including salaries, and
administering compensation plans including granting awards under the Company's stock option plans to its employees.
Compensation of the Chief Executive Officer
The Company's President, Patrick M. Byrne, declined to accept any salary or bonus payment from the Company during 2003. Dr. Byrne also declined to
accept any salary or bonus payment from the Company during each of the two preceding years. Dr. Byrne's lack of any cash compensation bears no
relationship at all to the Company's performance.
In addition to serving as President, Dr. Byrne serves as Chairman of the Board of Directors, and controls High Plains Investments, LLC, which is the
Company's largest stockholder. The Committee believes that Dr. Byrne's economic interest in the Company, directly and through High Plains Investments
LLC, is fully aligned with the economic interests of the other stockholders.
Compensation Policies Applicable to other Executive Officers
The Company's compensation program for its executive officers other than Dr. Byrne consists of (i) salaries, and (ii) stock option grants.
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Salaries. The Company pays its executive officers other than Dr. Byrne salaries that are determined, in part, based on the responsibilities of the
position and the experience and knowledge of the individual. Salaries are adjusted periodically at the discretion of the Committee, taking into consideration
factors including the Company's growth, performance and financial condition and the Committee's subjective perception of the individual's performance. The
Company did not pay any bonuses to any of its executive officers during 2003. The lack of any bonus payments bears no relationship at all to the Company's
performance.
Stock Option Grants. The second component of the Company's compensation program consists of stock option grants. The options granted to executive
officers during 2003 were granted in January, March, April, and July of 2003, with exercise prices of $15.25, $13.57, $8.54 and $13.09 per share,
respectively, which the Committee determined to be equal to the fair market value of the underlying shares of common stock on the date of grant. The
Committee believes that stock option grants or other equity awards provide proper incentives to management and align the economic interests of management
with those of the other stockholders.
Members of the Compensation Committee
Gordon S. Macklin
John A. Fisher
Stock Performance Graph
The following graph shows a comparison of cumulative total stockholder return, calculated on a dividend reinvested basis, from the effective date of the
initial public offering of Overstock's common stock (May 30, 2002) through December 31, 2003 for Overstock, Media General's Nasdaq U.S. Index and
Media General's Internet Software and Services Index. The graph assumes that $100 was invested in Overstock's common stock (at the initial public offering
price of $13.00 per share), and the above indices on May 30, 2002. Historic stock price performance is not necessarily indicative of future stock price
performance.
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