This excerpt taken from the AGN DEF 14A filed Mar 21, 2007.
Base salaries provide our executive officers with a degree of financial certainty and stability. In order to attract and retain highly qualified executives, we provide base salaries comparable to those being paid by the comparison peer group and survey companies. The Compensation Committee annually reviews and determines the base salaries of our Chief Executive Officer and our other named executive officers. Salaries are also reviewed in the case of executive promotions or other significant changes in responsibilities. In each case, the Compensation Committee takes into account competitive salary practices, scope of responsibilities, the results previously achieved by the executive and his or her development potential. In 2006, the Compensation Committee determined that the base salaries provided to our named executive officers on the whole were slightly below the composite median base salaries provided by the comparison peer group and survey companies.
On an individual basis, our base salary increase program is designed to reward performance consistent with our overall financial performance in the context of competitive practice. Annual performance reviews, including changes in an executive officers scope of responsibilities, and our formal merit increase guidelines in combination with general market trends determine individual salary increases. In February 2006, the named executive officers received an average salary increase of 6.9% from fiscal year 2005 to fiscal year 2006. The largest salary increase was 11.4%, with the lowest increase at 5.0%. No formulaic base salary increases are provided to the named executive officers. Douglas S. Ingram received an additional 10.2% increase in base salary in December 2006 in connection with his appointment to the newly created executive officer position of Executive Vice President, Chief Administrative Officer, General Counsel and Secretary.