Staples 2015 Annual Report Download - page 33

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www.staplesannualmeeting.com STAPLES 29
i EXECUTIVE COMPENSATION AND
COMPENSATION DISCUSSION AND ANALYSIS
Our Compensation Discussion and Analysis (“CD&A”)
describes the guiding principles and processes we use to
design and manage our compensation program, provides
an overview of our business performance and progress in
2015 with our reinvention strategy and most importantly,
demonstrates within that context the strong link between pay
and performance for our Named Executive Officers (“NEOs”).
We also present a summary of shareholder feedback and
the positive changes our Board has made to address
this feedback.
The CD&A is structured as follows:
• An executive summary, including our business
performance and shareholder engagement in 2015 (p. 29)
• A presentation of compensation earned by our NEOs as a
result of this performance (p. 35)
• A detailed discussion of our 2015 compensation program
(p. 37) followed by the processes we use in designing and
managing compensation (p. 42)
• Additional material relating to governance of our
compensation program such as policies relating to stock
ownership and recoupment (p. 45)
I EXECUTIVE SUMMARY
Guiding Principles of Our Compensation Program
The Staples Compensation Committee (the “Committee”)
believes that executive compensation should be directly
linked to performance and the creation of long-term value for
our shareholders.
Based on this principle, as well as consultation with
shareholders, the Committee has developed annual and long-
term incentive programs that are tied to objective, quantifiable,
and rigorous performance metrics. We believe that the
metrics used in our incentive programs support the long-term
alignment of pay with performance.
The structure of our executive compensation program is
intended to enable the company to attract, retain and motivate
a talented management team in driving our business objectives
of both top line and bottom line results as well as attractive
returns on capital. We believe our overall program, and in
particular our focus on granting performance-based awards, is
consistent with current best practices in compensation design.
Business Overview
Staples is a global company providing a variety of products
and services to business customers of all sizes and consumers
in 25 countries. In 2015, we operated in three business
segments:
• Our North American Stores & Online segment (46% of
total company sales) offers easy-to-shop stores and
websites.
• Our North American Commercial segment (37% of total
company sales) consists of the U.S. and Canadian
businesses that sell and deliver products and services
directly to businesses, including Staples Business
Advantage and Quill.com.
• Our International Operations segment (17% of total
company sales) consists of businesses in 23 countries in
Europe, Australia, South America and Asia.
2015 Performance Highlights
The needs of our customers are rapidly changing. Over the
past several years, demand for office supplies, computers,
business machines and technology accessories has been
declining. These trends have negatively impacted total
company sales and earnings. In response, the company
has been working on a strategic reinvention plan designed
to position the company to generate long-term sales and
earnings growth. The Committee sets rigorous financial
metrics tied directly to the success of this strategic reinvention
program and the creation of long-term shareholder value in a
highly competitive industry.