Heidrick & Struggles International (HSII)

Base Salary

For each executive, base salaries are reviewed against levels for positions with similar responsibilities at the peer companies using comparative data prepared by Mercer. The Committee then gives consideration to individual performance, internal equity, functional expertise, experience and scope of responsibilities in approving any changes to the base salary.

For executives with dual roles (management and consultant), the base salary consists of a combination of management salary and consultant salary. In 2008, those executives included Mr. Davis, Ms. Germain and Mr. Peters. A management salary is paid to an executive with dual roles in consideration of the executive’s management and policy-making responsibilities within the Company, while a consultant salary is paid in consideration of the executive’s consulting presence in the marketplace. A consultant salary is referred to as a Fee and Source of Business (“FSOB”) salary and is applied against any annual incentive amount earned under the Company’s FSOB Bonus Plan. The Company does not reduce the consultant salary if the FSOB incentive amount earned for a fiscal year is less than the FSOB salary paid. The other named executive officers have only management roles and thus are paid only a management salary.

For all consultants, including dual-role named executive officers, FSOB salaries are determined on the basis of the Company’s knowledge of the market for recruiting professionals and are set at levels intended to be competitive with base salaries for similarly productive consultants at the Company’s major competitors.

On February 8, 2008, the Committee approved base salary increases for Mr. Kelly, Mr. Davis, Mr. Blake and Mr. Peters after reviewing the comparative data available for each position and taking into consideration each executive’s individual performance. To better reflect the current expectations and job duties of the Regional Managing Partner role with the existing compensation structure, the Committee approved the shift of some consultant salary into additional management salary for Mr. Davis and Mr. Peters as each executive continues to spend a proportionately larger amount of time managing his respective region versus carrying out consulting duties.

In connection with Mr. Krenz joining the Company, the Committee approved his base salary on May 22, 2008. In making its decision, the Committee reviewed comparative data, focusing on base salary levels for Chief Financial Officers hired over the past year at the peer group companies, and determined that Mr. Krenz’s salary was competitive with these levels.

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In 2008, the Committee did not approve any changes to the 2007 base salaries for Ms. Kamerick, Ms. Germain or Mr. Hines. Ms. Germain’s management and consultant salaries had been increased during the latter part of 2007 in connection with her appointment to Managing Partner, Strategic Partners. Mr. Hines’ management salary had been increased in 2007 in connection with his appointment to Managing Partner, Americas and Chief Operating Officer.

2009 Changes to Base Salary.    In light of the current economic climate, the Committee froze base salaries for Company executives in 2009, except for Mr. Davis for whom the Committee approved an increase in base salary in connection with his promotion to Managing Partner, Global Practices.

See the Summary Compensation Table on page 21 for more details on base salary levels approved by the Committee in 2008 for the named executive officers.

Base Salary

For each executive, base salaries are reviewed against levels for positions with similar responsibilities at the peer companies using comparative data prepared by Mercer. The Committee then gives consideration to individual performance, internal equity, functional expertise, experience and scope of responsibilities in approving any changes to the base salary.

For executives who have dual roles with the Company (management and consultant), the base salary consists of a combination of management salary and consultant salary. In 2007, those executives included Ms. Valerie E. Germain, Mr. David C. Peters and Mr. Charles G. Davis. A management salary is paid to dual-role executives in consideration of their management and policy-making responsibilities within the Company, while a consultant salary is paid in consideration of their consulting presence in the marketplace. A consultant salary is referred to as a Fee and Source of Business (“FSOB”) salary and is applied against any annual incentive amount earned under the Company’s FSOB Bonus Plan. The Company does not reduce the consultant salary if the FSOB incentive amount earned for a fiscal year is less than the FSOB salary paid. The other two named executive officers, Mr. L. Kevin Kelly and Ms. Eileen A. Kamerick, have only management roles and thus are paid only a management salary.

On February 21, 2007, the Committee approved the 2007 base salaries for the executives based on the Chief Executive Officer’s recommendations and other considerations. Ms. Germain’s salary adjustments were approved by the Committee on September 19, 2007 when she became an executive.

See the Summary Compensation Table on page 20 for more details on base salary levels approved by the Committee in 2007 for the named executive officers.

Base Salary

The Committee determines annually the base salary for each executive based on comparative data prepared by Mercer, the Chief Executive Officer’s recommendations for his direct reports and other considerations taken into account by the Committee. When a change in role occurs for an executive during the year, the base salary is typically reviewed and adjusted (if necessary) by the Committee. All base salary increases in 2006 were approved by the Committee. Most of the changes were approved on February 17, 2006 in an executive session (outside the presence of the Chief Executive Officer) and were deemed effective as of January 1, 2006. On September 13, 2006, the Committee approved a base salary increase of 10% for the newly promoted Chief Executive Officer.

For each executive, the base salary is reviewed against levels for positions with similar responsibilities at the peer companies and a broader group of similarly-sized publicly-traded companies where relevant. The Committee then gives consideration to individual performance, internal equity, expertise, experience, and scope of responsibilities in approving any changes to the base salary.

For executives who have dual roles (management and consultant), the base salary consists of a combination of management salary and consultant salary. In 2006, those executives included L. Kevin Kelly (until September 12, 2006), Michael Franzino, Kelvin J.R. Bolli-Thompson and Bonnie Gwin (until September 30, 2006). A management salary is paid to dual-role executives in consideration for their management and policy-making roles within the Company, while a consultant salary is paid in consideration for their consulting presence in the marketplace. A consultant salary is referred to as a Fee and Source of Business (“FSOB”) salary and is applied against any annual incentive compensation earned under the Company’s FSOB Bonus Plan. The Company does not reduce the consultant salary if the FSOB incentive earned for a fiscal year is less than the FSOB salary in place.

See the Summary Compensation Table on page 19 for more details on base salary levels approved by the Committee in 2006 for the executives.