JVA » Topics » C OMPENSATION D ECISION -M AKING P OLICIES A ND P ROCEDURES .

This excerpt taken from the JVA DEF 14A filed Feb 26, 2009.

COMPENSATION DECISION-MAKING POLICIES AND PROCEDURES.

Decision-Making and Policy-Making.  As an American Stock Exchange listed company, we must observe governance standards that require executive officer compensation decisions to be made by the independent director members of our Board or by a committee of independent directors.  Consistent with these requirements, our Board has established a Compensation Committee all of whose members are independent directors.  

The Compensation Committee provides advice and makes recommendations to our Board in the areas of employee salaries and benefit programs.  The Compensation Committee has established a formal charter.  Compensation consists of three components: (1) base salary; (2) bonuses; and (3) long-term incentives (e.g., stock options, deferred compensation and fringe benefits).

The Compensation Committee generally meets at least once each year.  During fiscal 2008, the Compensation Committee met one time.  It considers the expectations of the Chief Executive Officer with respect to his own compensation and his recommendations with respect to the compensation of more junior executive officers, as well as empirical data on compensation practices at peer group companies.  The Compensation Committee does not delegate its duties to others.  

Use of Outside Advisors and Survey Data.  The Compensation Committee uses its own criteria coupled with empirical peer group data to establish the chief executive officer’s base salary.   In 2008, the peer group consisted of five coffee roasting companies.  Among other things, the Compensation Committee analyzed the net sales, net income and overall executive compensation of each of the peer group companies in determining the appropriate salary levels for the chief executive officer.



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