Hasbro (HAS)

Base salaries for new executive officers are initially set at a level the Company determines represents a competitive fixed reward to the executive. By “competitive”, the Company means the reward is sufficient to (i) hire the executive in question, rather than losing that person to a competitive employment opportunity, (ii) retain the executive, and (iii) fairly compensate the executive for their responsibilities, skills and work. This is done by evaluating the responsibilities of the position being filled, the experience of the individual being hired and the competitive marketplace for comparable executive talent.

 

As part of its effort to control expenses and maintain profit levels in the current difficult economic times, the Company has taken a number of steps for 2009. These include a worldwide salary freeze, excepting only situations where people are promoted, take on significant additional responsibilities, or increases in salary are required for legal or other reasons. Consistent with the Company’s policy to freeze the salaries for its employees in 2009, the base salaries for Mr. Goldner, Mr. Hargreaves, Mr. Nagler, Mr. Billing and Mr. Frascotti have not been increased for fiscal 2009. Mr. Verrecchia retired as an officer and employee of the Company effective December 31, 2008.

 

compensation package that is highly performance-oriented by placing a significant portion of total executive compensation in variable elements.

 

The salaries for all five of the Company’s named executive officers in fiscal 2006 are included in the Summary Compensation Table that follows this report. Consistent with the Company’s general philosophy of only increasing executive base salaries in the event of changes in responsibility, particular achievements or lack of competitiveness with benchmarked companies, Mr. Verrecchia, Mr. Nagler and Mr. Gardner did not receive increases in base salary during 2006. On January 20, 2006, Mr. Goldner was promoted to Chief Operating Officer of the Company, assuming significantly greater responsibilities than he had previously held as President of the U.S. Toys Segment. In connection with this promotion, Mr. Goldner’s annualized base salary was increased from $700,000 to $800,000. In April of 2006, Mr. Hargreaves’ base salary was increased from $475,000 to $500,000. This increase was attributable to Mr. Hargreaves’ increased responsibility, associated with the Company’s compliance with increased regulatory requirements, and from the Company’s review of relevant benchmarking information which indicated that Mr. Hargreaves’ base salary was at the lower end of the range between the 50^th and 75^th percentiles.

 

Subsequent to the end of 2006 the Company took two actions with respect to the base salaries of named executive officers. Both of these actions were taken in February 2007, but were made effective as of January 1, 2007. First, in light of its review of compensation for Chief Executive Officers at companies deemed comparable to, or competitive with, the Company, the Committee recommended, and the Board approved, an increase in the base salary for Mr. Verrecchia from $1 million to $1.2 million. Second, Mr. Hargreaves was promoted from Senior Vice President and Chief Financial Officer to Executive Vice President, Finance and Global Operations and Chief Financial Officer. In connection with this promotion and the increase in Mr. Hargreaves’ responsibilities, the base salary for Mr. Hargreaves was increased from $500,000 to $600,000.