Staples 2012 Annual Report Download - page 32

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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis ("CD&A")
The Compensation Committee (the "Committee") of our Board of Directors (the "Board") consists of independent directors
who oversee our executive compensation program, review our compensation strategy and determine all compensation for our
executive officers. This section describes the compensation program for our Chief Executive Officer ("CEO"), Chief Financial
Officer ("CFO") and three other most highly compensated executive officers for 2012, whom we collectively refer to as our "named
executive officers" ("NEOs"). Our NEOs include:
 Ronald L. Sargent, CEO
 Christine T. Komola, CFO
 Michael A. Miles, Chief Operating Officer (employment ended on February 2, 2013)
 Joseph G. Doody, President North American Commercial (“NAC”)
 Demos Parneros, President North American Stores & Online (“NAS&O”)
John Mahoney, our former Vice Chairman and CFO, is also an NEO as he served as our CFO for the first three days of
fiscal 2012. A discussion of Mr. Mahoney's 2012 compensation is discussed separately in “2012 Compensation for Departing
NEOs” on page 33.
Executive Summary
The primary objective of our compensation program is to align executive pay with long term stockholder value creation.
Accordingly, the 2012 compensation of our NEOs declined an average of 26% as compared to 2011, demonstrating our program's
design which emphasizes “at risk” pay.
Staples is the world’s largest office products company and second largest internet retailer. We operate a highly complex,
multi-channel business and we currently serve businesses of all sizes and consumers in 26 countries. In September 2012, Staples
announced a strategic plan to accelerate growth and outlined our vision: every product your business needs to succeed. As the
Committee considered the compensation program for 2013, it focused on driving the highest level of engagement of our executive
team to lead the organization through its strategic reinvention, and the importance of attracting and retaining world class talent
capable of reshaping our business. To motivate our executives to execute on the key priorities of this plan, including to aggressively
pursue growth opportunities, improve cross channel coordination and adapt the business to meet the changing needs of our diverse
customer base, the Committee made further changes to our compensation program for fiscal year 2013. These changes include
increasing the percentage of compensation that is performance-based or “at risk,” re-tooling the goals to prioritize sales growth,
incorporating a relative TSR performance measure and, overall, streamlining the long term incentive program into a single element
of performance shares. These changes, which align with feedback we received from our stockholders, are discussed in more detail
below.
Business Highlights
 Developed and launched company-wide strategic reinvention plan:
Reorganized North American business structure by combining our retail and online businesses to better meet
the changing needs of our customers.
More than tripled our assortment on Staples.com, ending the year with 100,000 products.
Announced plan to improve retail store productivity in North America by reducing square footage by 15
percent by 2015.
Launched plan to achieve $250 million of annual pre-tax cost savings by 2015.
Restructured European businesses including closure of 15 percent of European stores.
 Generated operating cash flow of $1.2 billion and invested $350 million in capital expenditures, resulting in free cash
flow of $870 million.
 Remained committed to returning excess cash to shareholders with share repurchase and cash dividends totaling $743
million.