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EXECUTIVE COMPENSATION AND COMPENSATION DISCUSSION AND ANALYSIS
44 STAPLES Notice of Annual Meeting of Stockholders
Compensation Analysis & Conclusions
This section describes the Committee’s analysis and conclusions relating to the overall level of compensation for our CEO and
other named executive officers.
CEO Compensation
Total CEO compensation for 2015 as reported in our Summary
Compensation Table was $9,863,575 including the grant date
fair value of the performance shares (representing 83% of
total 2015 compensation), which are earned over the fiscal
2015-2017 period and paid only if the performance goals
are achieved.
In November 2015, the Committee, with input from Exequity,
reflected on the company’s performance in relation to
Mr. Sargent’s earned compensation. The Committee examined
Staples’ total shareholder return, earnings per share growth,
return on invested capital and revenue growth, and compared
them to the results generated by our peer companies. When
the Committee performed its review in November 2015,
complete fiscal year pay and performance data for the peer
group was available only through 2014, so the Committee
limited its analysis to the years 2012-2014.
Percentile vs. Peer Group – Three-Year
CEO Position Base Salary Target Cash Target LTI Average Total
Compensation @ Target
Ronald L. Sargent Chairman & CEO 45th 36th 58th 57th
Percentile vs. Peer Group – One-Year
CEO Position Base Salary Target Cash Target LTI Total Compensation
@ Target
Ronald L. Sargent Chairman & CEO 31st 19th 29th 23rd
Realized Total Compensation — In considering the
appropriateness of our CEO’s pay, the Committee examined
realized total direct compensation, or “TDC,” over the
performance period and not the total compensation reported
in our Summary Compensation Table. Realized TDC includes
base salary, annual bonus earned, cash long-term incentives
earned, gain realized on the exercise of Stock Options, and
the value of Stock Awards that vested during the applicable
measurement period. Our executive compensation program
is designed to promote long-term sustained performance, and
the Committee believes that realized TDC is a better reflection
of the appropriateness of individual earnings than is the total
reported in the Summary Compensation Table because
realized TDC incorporates changes in equity award value
(reflecting increases and decreases in share price) over the
performance cycle, and, therefore, takes into account value
commensurate with investor returns.
Realized total compensation over the 2012-2014 period was
roughly 80% below the peer group median. In fact, each
element of Mr. Sargent’s compensation lagged far below its
peer group standard and aligned with our performance over
the three-year period.
Compensation at Target — The Committee compared the
CEO’s compensation at target to the compensation at target for
peer group companies and observed that our CEO’s average
total compensation at target was above the median (57th
percentile) of the peer group as indicated in the chart above.
However, over the 2012-2014 period, cash compensation
at target was reflective of overall performance with total
shareholder return, return on invested capital, earnings per
share growth and revenue growth all in the lower quartile.
Other NEO Compensation
The Committee also examined the relationship between pay
and performance insofar as it related to the NEOs other than
the CEO. In the absence of realized TDC information across the
peer community, the Committee considered the relationship
between performance generated and each incumbent’s target
compensation. The tables below display how our CFO and
business unit Presidents’ base salary, target annual cash
incentive (bonus), target long-term incentive (LTI) and total
compensation at target compared to total shareholder return,
earnings per share growth, revenue growth, and return on
invested capital in 2014 against the peer group.
Percentile vs. Peer Group – One-Year
NEO Position Base Salary Target Bonus Target LTI Total Compensation
@ Target
Christine T. Komola CFO and EVP 1st 9th 44th 32nd
Demos Parneros President NAS&O 15th 5th 37th 11th
John Wilson President IO&T 14th 5th 37th 10th