This excerpt taken from the GPS DEF 14A filed Apr 7, 2009.
Fiscal 2009 Annual Bonus
In light of the difficult economic environment and substantial uncertainty around a recovery in consumer spending, the Committee determined that shortening the performance measurement period for the financial component of the annual bonus to six months was prudent. This allows for establishment of goals based on visibility to performance potential over a period which is more realistic. Bonus payouts under the financial component will continue to be made following completion of the full fiscal year, based on results for each six month period.
Earnings goals for the first six months of fiscal 2009 have been set at a lower level than the comparable period in fiscal 2008, reflecting the severe downturn in the economy and the impact on our potential performance. In addition, our ability to forecast potential performance going forward is more limited in this environment and we are aggressively managing costs. In light of this, the additional bonus opportunity for executives other than the CEO described under Fiscal 2008 Annual Bonus above will not be continued for fiscal 2009.
No other significant changes have been made to the program for fiscal 2009.
This excerpt taken from the GPS DEF 14A filed Apr 16, 2008.
Fiscal 2007 Annual Bonus
The Company established an annual cash incentive bonus program for executives to motivate and reward achievement of annual financial and operating objectives and to provide a competitive total compensation opportunity in support of our compensation objectives. The annual incentive bonus was based on two components:
In setting the 2007 annual bonus structure, the Committee considered the Companys business priorities and the factors described under Compensation Analysis Framework above and, based on this analysis, made these changes to create greater focus on earnings improvement and achievement of operating objectives:
This excerpt taken from the GPS 8-K filed Feb 12, 2008.
Annual Bonus. Based on your position as Corporate Executive Vice President, you will continue to be eligible for an annual bonus based on achievement of Gap Inc. and/or Division financial objectives as well as individual performance. Under the current program, your annual target bonus will be 75% of your base salary. Depending on results, your actual bonus, if any, may be higher or lower and can reach a maximum of 150%. Bonus payments will be prorated based on active time in position, divisional or country assignment and changes in base salary or incentive target that may occur during the fiscal year. Your annual bonus for fiscal year 2007 is scheduled for payment in March 2008. You must be employed by Gap Inc. on the payment date with a performance rating of On Target or above to receive an award. Gap Inc. has the right to modify the program at any time. Management discretion can be used to modify the final award amount. Bonus payments are subject to supplemental income tax withholding.
This excerpt taken from the GPS DEF 14A filed Apr 26, 2007.
Fiscal 2007 Annual Bonus
The annual cash incentive bonus program for fiscal 2007 is intended to create greater focus on earnings and achievement of operating objectives with the goal of improving business performance while continuing to meet our other compensation objectives. To support this objective, we have made the following changes to the program for fiscal 2007:
We believe that using earnings as the sole measure for financial performance simplifies the plan and is the right measure for fiscal 2007 to gauge our progress in improving financial performance. We also believe that no longer requiring achievement of Company threshold earnings before any payment is made under the operating objectives component further reinforces the importance of achievement of these objectives. However, we felt it was prudent to reduce the weight of this component to 25% given this change. For fiscal 2007, the financial component of the annual incentive bonus for Ms. Hansen will be based on the better of: 1) the bonus that would be earned based on Banana Republic financial results and assuming her salary prior to assumption of the role of President, Gap North America, or 2) the bonus that would be earned based on Gap North America financial results and assuming her current salary as defined under the Executive MICAP. The Committee determined this treatment was appropriate to take into account the strategies Ms. Hansen put in place at Banana Republic, which will continue to impact Banana Republics fiscal 2007 results, as well as her ability to impact Gap North America results in fiscal 2007. Pursuant to her employment offer, Ms. Robertson will receive an annual incentive bonus of at least $337,500 for fiscal 2007. The annual incentive bonus structure for the CEO will be determined upon hire.
The threshold, target, and maximum performance goals for the financial component, as well as the goals for the operating objectives component, were established using the same general principles and intent for likelihood of achievement previously described for fiscal 2006.