|
|
 | | | |
- close
- close
- close
- close
This excerpt taken from the IM DEF 14A filed Apr 23, 2008. Factors
in Designing and Determining Levels of Executive
Compensation
The primary focus in setting compensation levels is to
approximate the competitive market by targeting the market
median; the primary basis for making payouts is achievement of
financial results aligned with shareholder interests. The
Committee has established a program designed to keep it abreast
of emerging trends and asks its consultant to report on these
trends on a regular basis. This includes the use of equity
compensation — including the prevalence of specific
incentive vehicles, the goals used in incentive programs, and
the relative importance of each component of compensation. In
some cases, officer incentive opportunities have been adjusted
from market for internal consistency but market practice is
preeminent in setting overall compensation levels. Performance
versus pre-established goals is the most important factor in
making actual awards.
Benchmarking. Generally, the Company
uses benchmarks in determining executive officer compensation
annually against a comparator group of companies. Ingram Micro
management engages an executive compensation consulting firm to
conduct a total compensation study of its executive officers.
For 2007, Hewitt collected and reported the survey data which
was then reviewed by Cook. Cook provided the Committee with its
own analysis and conclusions to be drawn from the data and
advised the Committee on setting appropriate compensation levels
for Ingram Micro’s executive officers including the Chief
Executive Officer.
The Company reviews the comparator group of companies each year.
Historically, we have been challenged in defining an appropriate
comparator group against which to benchmark our executive
officers’ compensation. Although we have direct
competitors, this is a small group, some of whom have revenue
that is substantially less than Ingram. We have attempted to use
a limited number of peer companies in the past to benchmark both
our executive officer compensation and financial performance but
obtained inconsistent results from year to year due to the small
number of companies included in the peer group. As a result, we
now use a subset of the Fortune 500 in Hewitt’s database,
because it represents the relevant labor market from which we
recruit executive talent. The Fortune comparator group for the
2006 report, which was used by the Committee in making
compensation decisions for 2007, consisted of 189 non-financial
companies in Hewitt’s database with the following
characteristics:
Table of Contents
These companies had the following median scope measures:
2006
Comparator Group (189 companies) ($ in millions)
The compensation report examined the competitiveness of Ingram
Micro’s executive compensation programs in total and by
each element of compensation (base pay, annual incentives, and
long-term incentives). In doing so, generally, the Committee
compared the value of each of Ingram Micro’s
executive’s compensation elements against the median
information available from the defined comparator group. The
Committee generally targeted the 50th percentile of the
median information available from the defined comparator group,
and used this information as one of the factors in making
compensation determinations. Benefits and perquisites were not
included in the 2006 or 2007 reports as they represent an
insignificant portion of our executive officer’s total
remuneration.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||
