Staples 2013 Annual Report Download - page 55

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but not limited to, the contributions of the executive to Staples, the financial performance of Staples, the marketplace, the
particular contemplated scenario and the guidance provided by the compensation consultant.
Input from Management
Certain officers within our Human Resources department regularly attend Committee meetings to provide information
and recommendations regarding our executive compensation program, including the Senior Vice President of Human Resources
and Vice President of Compensation and Benefits. Among other things, these officers present our CEO's recommendations
regarding any change in the base salary, bonus, equity compensation, goals related to performance-based cash or equity
compensation and other benefits of other senior executives. These officers also compile other relevant data at the request of the
Committee. The CEO's recommendations are based in part on the results of annual performance reviews of the other executives.
The Committee is not bound by such recommendations but generally takes them into consideration before making final
determinations about the compensation of such executives other than our CEO. The CEO, at the discretion of the Committee,
may be invited to attend all or part of any Committee meeting to discuss compensation matters pertaining to the other executives,
and in fiscal 2013, he attended three of the five Committee meetings. When discussing compensation matters pertaining to our
CEO, the Committee generally meets in executive sessions with its independent compensation consultant without any member
of management present.
Administration of Incentive Plans
The Board and the Committee, through delegated powers, have broad discretion in administering the cash and stock
incentive plans. This discretion includes the authority to grant awards, determine target awards, and select performance objectives
and goals, along with the ability to adopt, amend and repeal such administrative rules, guidelines and practices as deemed
advisable. In addition, the Committee has broad discretion to modify awards and determine goal attainment and the payment
of awards under each plan. The Committee may determine to what extent, if any, specific items are to be counted in the relevant
financial measures for any particular business and whether special one-time or extraordinary gains and/or losses and/or
extraordinary events should or should not be included or considered in the calculation of goals. The Committee can decrease
but not increase incentive awards.
The Board has delegated authority to the Chairman and CEO to grant stock options and restricted stock units and, in
his capacity as Chairman, restricted stock to non-executive employees out of an annual pool of 600,000 shares. The annual pool
is designed to be used between quarterly Committee meetings to facilitate making new hire and retention grants and to reward
special accomplishments and achievements of associates. Awards from the annual pool are granted on the earlier of the first
business day of the month that follows appropriate approval or two business days after the Committee's ratification of the award.
Related Policies and Considerations
Risk Assessment
In December 2013, the Committee conducted its annual risk assessment of our executive officer compensation
programs. The evaluation included an analysis of the appropriateness of our peer group, compensation mix, performance metrics,
performance goals and payout curves, payment timing and adjustments, equity incentives, stock ownership guidelines/trading
policies, performance appraisal process and leadership/culture. In addition, the Committee reviewed the major compensation
plans with regard to risk mitigators attributable to each of the programs. The risk mitigators included the balanced mix of cash
and equity incentives, the mix and quality of the performance metrics, the stock ownership guidelines and an aggressive
recoupment policy. The Committee also considered and reviewed the executive compensation issues raised by the participants
in the Company's corporate governance outreach program and the changes made to the executive compensation program as
described earlier in this CD&A. Based on its evaluation and recognizing that all compensation programs are inherently risk
laden, the Committee determined that the level of risk within our compensation programs was appropriate and did not encourage
excessive risk taking by our executives. Accordingly, the Committee concluded that our compensation programs are not
reasonably likely to have a material adverse effect on the Company.
Tax and Accounting Implications
Under Section 162(m) of the Internal Revenue Code, certain executive compensation in excess of $1 million paid to
our CEO and to our three most highly compensated officers (other than the CEO and CFO) whose compensation is required to
be disclosed to our stockholders under the Securities Exchange Act of 1934, is not deductible for federal income tax purposes
unless the executive compensation is awarded under a performance-based plan approved by stockholders. To maintain flexibility
in compensating executive officers in a manner designed to promote varying corporate goals, the Committee has not adopted
a policy that all compensation must be deductible. The Committee reviews the impact of Section 162(m) and intends, to the
extent practicable, to preserve deductibility under the Internal Revenue Code of compensation paid to our executive officers