Staples 2015 Annual Report Download - page 51

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EXECUTIVE COMPENSATION AND COMPENSATION DISCUSSION AND ANALYSIS
www.staplesannualmeeting.com STAPLES 47
Tax and Accounting Implications
Under Section 162(m) of the U.S. 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 it determines to
be practicable, to preserve deductibility under the Internal
Revenue Code of compensation paid to our executive officers
when consistent with our goal of utilizing compensation
programs that attract and retain key executives and align with
stockholder interests.
All annual cash incentive awards and performance shares
awarded to our NEOs are paid pursuant to plans approved by
our stockholders and are potentially deductible by us. Time-
based restricted stock does not qualify for the performance-
based exception to Section 162(m), but the Committee has
determined that the retention benefit derived from such
awards outweigh any potential tax benefit to us.
The compensation that we pay to our NEOs is expensed in our
financial statements as required by U.S. generally accepted
accounting principles. As one of many factors, the Committee
considers the financial statement impact in determining
the amount of, and allocation among the elements of,
compensation. Stock-based compensation is accounted for
as required under FASB ASC Topic 718.
COMPENSATION COMMITTEE REPORT
The Committee’s objective was to maintain a strong link between pay and performance and to continue to motivate our executives
to execute on the key priorities of the strategic plan. The Committee reaffirmed its commitment to pay for performance and the
compensation philosophy established in 2013.
The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required
by Item 402(b) of Regulation S-K with management and, based on this review and discussion, recommended to the Board that
the Compensation Discussion and Analysis be included in this proxy statement.
Compensation Committee
Paul F. Walsh, Chair
Carol Meyrowitz
Kunal S. Kamlani