This excerpt taken from the GMCR DEF 14A filed Jan 28, 2008.
Elements of Compensation
The main elements of compensation include base salary, annual cash incentives and long-term equity-based incentives. We believe that base salary should provide a secure base of compensation that is competitive in the marketplace and sufficient to attract and retain highly talented individuals. We designed the annual cash incentives and long-term equity portions of our compensation package to link our named executive officers compensation with both the annual and the long-term success of the Company. The annual incentives link compensation with individual targets and motivate our named executive officers to meet short-terms goals. The long-term equity incentives link compensation to the long-term growth and success of the Company.