This excerpt taken from the GIS DEF 14A filed Aug 10, 2009.
CEO Performance and Compensation
In fiscal 2009, the compensation committee recommended and the board of directors approved the annual incentive and stock awards for Mr. Powell, the companys Chairman and Chief Executive Officer, consistent with the methods used for other senior executives. In determining Mr. Powells individual performance and annual incentive award, the compensation committee evaluated his performance by soliciting written feedback from all non-employee directors and subsequently discussing the consolidated input with all non-employee directors in executive session. The criteria utilized to determine Mr. Powells performance included the companys financial and operational performance for fiscal 2009, the overall level of leadership he provided, and his continued ability to develop and implement strategies to enhance stockholder value. The compensation committee also considered Mr. Powells performance against his pre-established fiscal year objectives in a number of additional areas such as brand building, key customer initiatives, international expansion, marketplace innovation, productivity improvement, organizational development, and stockholder relations.
Consistent with all company officers, Mr. Powell did not receive a merit increase in July 2009. Based on the annual assessment of his performance by the board of directors, the compensation committee and full board of directors approved a fiscal 2009 annual incentive payment to Mr. Powell of $1,910,770 in cash and 13,038 restricted stock units requiring a matching investment, and a long-term incentive award of 53,662 restricted stock units and 268,306 stock options. The annual and long-term incentive awards were based on the Corporate Performance Rating of 1.77 and, therefore, the stock awards include an upward adjustment of 27%.
In fiscal 2009, the accounting expense listed for Mr. Powells Stock Awards and Option Awards and his Total Compensation in the Summary Compensation Table increased substantially from prior years, because he became eligible for early retirement, and to a lesser extent because of year-to-year increases in salary and awards due to promotion and performance. In accordance with SFAS 123R, the entire value of awards to retirement-eligible individuals that would vest on retirement is expensed at grant rather than over the vesting period of the awards. Mr. Powells Change in Pension Value was driven primarily by a year-to-year increase in salary, along with an additional year of age and service.
Mr. Powell was promoted to Chairman and Chief Executive Officer in fiscal 2008. Based on the most recent proxy analysis conducted by the independent compensation consultant, Mr. Powells total direct compensation for fiscal 2009 is positioned between the 25th percentile and median of chief executive officer compensation for peer group consumer products companies. The relative positioning of each pay element for Mr. Powell is as follows: