Staples 2014 Annual Report Download - page 48

EXECUTIVE COMPENSATION AND COMPENSATION DISCUSSION AND ANALYSIS
44 STAPLES Notice of Annual Meeting of Stockholders
Long Term Incentive Plan Awards
Performance Share Awards
Long-term incentive awards for our NEOs are delivered solely
in performance shares, which for 2014 were authorized under
our Amended and Restated 2004 Stock Incentive Plan. These
long-term awards are subject to a three year performance
period, with goals set annually for each year of the performance
period. The Committee believes that setting annual goals are
more appropriate milestones in measuring progress against
our reinvention strategy in light of the high level of uncertainty
in our industry during this dynamic period, but that overall
performance should be measured over a three-year period. In
addition, any award that is earned based on performance will
be increased or decreased by 25% based on the company’s
three-year TSR relative to the returns generated by the S&P
500 companies. As of January 31, 2015, two years into the
2013-2015 grant, our total shareholder return over the first
two years of the performance period is at the 56th percentile
of the S&P 500.
The Committee selected RONA% (50%) and Sales Growth %
(50%) as the 2014 performance metrics because these metrics
are linked to the execution of our reinvention strategy and are
indicators of stockholder value enhancement. The Committee,
working with its independent compensation consultant,
employed statistical modeling and set threshold performance
levels required for payout, and maximum targets that if fully
achieved would result in payouts at 200% of target. The method
of calculation and the fiscal 2014 target goals were as follows:
2014 Performance Share Plan - Goals & Metrics
RONA % Sales Growth %
Threshold 7.92% -5.20%
Target 8.90% 2.29%
Maximum 10.22% 8.25%
Actual Result 8.95% -0.61%
• RONA% - Return on net assets is calculated as net
operating profit after taxes (operating profit, add rent
expense) as a percentage of net assets (total assets,
add interest bearing debt, add net capitalized rent, add
implied goodwill). The target goal of 8.9% was set in line
with the Company’s financial budget.
• Sales Growth % - Sales Growth is based on the sales
figures reported in our financial statements of 2014 as
compared to 2013, which included a 53rd week. The
target goal was 2.29%.
The tables below set forth, for each NEO, the level of goal achievement for fiscal 2014, along with the target award for the three-
year performance periods 2013-2015 and 2014-2016.
Named Executive Officer
3 Year Performance Period Achievement
(2013 - 2015)
Target
Award ($)
Target
Award
(Shares)
2013
(RONA% and
Sales Growth%)
2014
(RONA% and
Sales Growth%)
2015
(RONA% and
Sales Growth%)
Ronald L. Sargent 49.7% 87.3% * $8,225,000 624,526
Christine T. Komola 49.7% 87.3% * $1,549,800 117,677
Joseph G. Doody 49.7% 87.3% * $2,169,100 164,701
Demos Parneros 49.7% 87.3% * $2,169,100 164,701
John Wilson 49.7% 87.3% * $1,518,475 115,299
* Achievement against 2015 goals will be determined by the Committee in March 2016
As of January 31 2015, two years into the 2013-2015 grant, our total shareholder return over the first two years of the performance
period is at the 56th percentile of the S&P 500.
Named Executive Officer
3 Year Performance Period Achievement
(2014 - 2016)
Target
Award ($)
Target
Award
(Shares)
2014
(RONA% and
Sales Growth%)
2015
(RONA% and
Sales Growth%)
2016
(RONA% and
Sales Growth%)
Ronald L. Sargent 87.3% * * $8,225,000 613,806
Christine T. Komola 87.3% * * $2,169,100 161,874
Joseph G. Doody 87.3% * * $2,169,100 161,874
Demos Parneros 87.3% * * $2,169,100 161,874
John Wilson 87.3% * * $2,169,100 161,874
* Achievement against 2015 and 2016 goals will be determined by the Committee in March 2016 and March 2017, respectively.