Staples 2007 Annual Report Download - page 51

reward the achievement of long term business objectives and to help us retain a successful and tenured management
team. In deciding to award this retention grant to Mr. Sargent, our Board considered the following additional factors:
• During Mr. Sargent’s term as Chief Executive Officer, our stock had, preceding the award, experienced a
compounded annual growth rate of 17.8% over the prior five years and 15.1% over the prior three years;
• Mr. Sargent had displayed exceptional leadership during his tenure at Staples and had been instrumental to
our success;
• The positive results of Mr. Sargent’s annual performance evaluation, which is based on the performance of the
business, accomplishment of reported goals and long term strategic objectives and the development of
management;
• The market for executive talent had continued to tighten and become more competitive, significantly
increasing the risk that executives of Mr. Sargent’s caliber would be actively recruited by other companies,
including our direct competitors, private equity investors and other leading organizations across the retail
sector; and
• Data provided by the independent compensation consultant that showed the potential value of Mr. Sargent’s
grant to be above the 75th percentile when compared to comparable grants made by companies within general
industry.
Retirement and Other Benefits
Our named executive officers are eligible to participate in health and welfare programs, such as medical, dental,
vision, disability, and supplemental life insurance on the same basis as our other salaried associates. In 2004, Staples
introduced The Staples Executive Benefits Program consisting of the benefits described in detail below. This program
was implemented to enhance our retirement and benefit offerings for senior management and to further support our
efforts to attract and retain top talent. All senior officers of Staples, including the named executive officers, are
eligible to participate in this program. For each plan or policy described below that requires payment of periodic
premiums or other contributions, we generally pay such premiums or other contributions for the benefit of each
named executive officer.
•Supplemental Executive Retirement Plan (SERP). The SERP is a non-qualified deferred compensation plan
which is generally intended to provide comparable benefits above the applicable limits of our 401(k) qualified
plan. Named executive officers and other officers of Staples may contribute a total of up to 100% of their base
salary and bonus. They receive matching contributions up to a maximum of 4% of base salary and bonus. The
matching contributions are credited at an interest rate established at the beginning of each year, which is based
upon the declared crediting rate on life insurance policies designated by the plan administrator to fund the
plan. For 2007, the annual interest rate was equal to 5.32%.
•Executive Life Insurance Plan. Our named executive officers, excluding Mr. Miles, are covered by a life
insurance plan that provides coverage equal to three times their annual base salary on both a pre-retirement
and a post-retirement basis if they leave Staples after at least 10 years of service or at age 65. Mr. Miles is
covered by a different insurance plan that we began offering to named executive officers in 2002. The newer
plan provides pre-retirement basic life insurance equal to three times annual salary up to a maximum amount
of coverage of $1.5 million and post-retirement life insurance coverage of twice the average of the named
executive officer’s highest five consecutive years’ base salary up to a maximum coverage of $1 million, provided
the executive is at least age 55 with five years of service when the executive leaves Staples.
•Long Term Care Insurance. This benefit pays $150 per day, adjusted annually, for a maximum of five years and
provides coverage while employed and post retirement following age 65, provided the executive has continued
premium payments during the interim and is at least age 55 with five years of service when the executive leaves
Staples.
•Supplemental Long Term Disability. If a named executive officer should become disabled and unable to work
for a period lasting more than 180 days, this benefit will provide a level of income not covered by our group
long term disability plan. Our group long term disability plan covers 60% of base salary, up to a maximum base
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