Staples 2012 Annual Report Download - page 39

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30
2012 Base Salary
In March 2012, the CEO recommended a 2.5% increase in base salary for the COO and Presidents of NAC and NAS&O
consistent with the budgeted salary increase for all associates. Ms. Komola was promoted to CFO in 2012 and her salary increased
21.6%. The Committee approved these increases and also decided to increase the CEO's salary by 2.5%, effective May 1, 2012.
Including the increase, the CEO's base salary remains below the median of base salaries for chief executive officers in our peer
group. The CEO's base salary is 11% of his annual target TDC. In general, the Committee allocates a greater percentage of the
CEO's TDC to performance-based and equity incentives because the CEO is uniquely situated to influence our short and long
term performance.
2012 Performance-Based Annual Cash Bonus (Amended and Restated Executive Officer Incentive Plan)
Each of the NEOs was eligible to participate in our Executive Officer Incentive Plan during our 2012 fiscal year. For
2012, the Committee selected three performance objectives, calculated as follows:
EPS (40%) - EPS is calculated using the amounts set forth in our financial statements. EPS is a funding mechanism for our
annual cash incentive program and threshold performance must be attained for any payment to be earned. The 2012 EPS
target goal was $1.49.
Operating Income (30%) - Gross profit less operating expenses. Incents associates to drive profitable business. The 2012
operating income target goal was $1,738 million.
Sales (30%) - Based on the amounts set forth in our financial statements. Incents associates to drive sales. The 2012 sales
target goal was $25.85 billion.
The operating income and sales goals reflect total Company performance for Messrs. Sargent and Miles and Ms. Komola. The
goals, other than EPS, for Messrs. Doody and Parneros are based on the performance of a combination of business units below
the operating segment level and are not disclosed because it would cause us competitive harm. The undisclosed operating income
and sales goals were set at a level of difficulty comparable to those of the Company goals.
Each performance objective has an associated threshold level that must be achieved for that portion of the bonus awards
to be paid. Additionally, target and maximum levels are set with increased payouts for better than expected performance. Bonuses
are not paid unless we achieve minimum EPS. The Company did not achieve the minimum earnings per share threshold and,
therefore, no bonus was earned or paid to any of the plan participants for fiscal 2012 performance.
The table below sets forth the target award and payout for our 2012 fiscal year under the Executive Officer Incentive
Plan. Threshold and maximum levels are disclosed in the “Grants of Plan-Based Awards for 2012 Fiscal Year” table in this proxy
statement.
NEO Target Award
(% of Base Salary) Payout
Ronald L. Sargent $1,805,079 (150%) $0
Christine T. Komola $215,000 (50%) $0
Michael M. Miles $710,940 (100%) $0
Joseph G. Doody $485,366 (80%) $0
Demos Parneros $485,366 (80%) $0