M » Topics » Base Salary

This excerpt taken from the M DEF 14A filed Apr 1, 2009.

Base Salary

Base salaries are designed to provide a level of cash compensation that is externally competitive in order to attract and retain executive talent and to compensate an individual for his or her level of responsibility and performance. The CMD Committee decisions regarding an individual’s base salary take into account external factors, such as inflation, and internal factors, including:

 

   

division and/or company performance;

 

   

the individual’s current salary and, if applicable, the pay range for the position;

 

   

the individual’s current and historical performance and contribution to Macy’s performance;

 

   

the individual’s future potential with Macy’s;

 

   

the individual’s role and unique skills; and

 

   

consideration of external market data for similar positions, adjusted for Macy’s size, the scope of responsibilities and the uniqueness of the role.

Following the close of the fiscal year, the CMD Committee, with input from the full Board, conducts an annual performance review for Mr. Lundgren. Mr. Lundgren conducts an annual performance review for the other Named Executives. The CMD Committee bases its decisions about whether to increase base salaries and, if so, by how much, on a number of factors, including those listed above. The CMD Committee reviews preliminary recommendations for annual increases at its February meeting and approves final recommendations at its March meeting. Annual increases in base salary normally take effect on April 1st of each year.

 

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Fiscal 2008 Action:    Following the conclusion of fiscal 2007, management, with input from Mercer and Mr. Lundgren, prepared for the CMD Committee a summary of the current total compensation package for each Named Executive and a proposed total compensation package for fiscal 2008 for each that reflected recommended increases in performance-based equity compensation (but no change to the overall dollar value of equity compensation) and recommended no increases in base salaries. The CMD Committee considered the current economic environment, the Company’s performance relative to its peers, the general movement of salaries in the marketplace, the Company’s stock price performance, the salaries of the Vice Chairs relative to that of Mr. Lundgren and to each other, and considered the other factors listed above with respect to each Named Executive. The CMD Committee also considered the results of its annual performance review of Mr. Lundgren and of Mr. Lundgren’s annual review of the individual performance of the other Named Executives.

Following its review, the CMD Committee accepted the recommendation that base salaries for fiscal 2008 remain at the same levels as base salaries in fiscal 2007:

 

     Base Salary Rate($)

T. Lundgren

   1,500,000

K. Hoguet

      800,000

T. Cole

      975,000

J. Grove

      975,000

S. Kronick

   1,100,000
This excerpt taken from the M DEF 14A filed Apr 1, 2008.
Base Salary
 
Base salaries are designed to provide a level of cash compensation that is externally competitive in order to attract and retain executive talent and to compensate an individual for his or her level of responsibility and performance. The CMD Committee decisions regarding an individual’s base salary take into account external factors, such as inflation, and internal factors, including:
 
  •  division and/or company performance;
 
  •  the individual’s current salary and, if applicable, the pay range for the position;
 
  •  the individual’s current and historical performance and contribution to Macy’s performance;
 
  •  the individual’s future potential with Macy’s;
 
  •  the individual’s role and unique skills; and
 
  •  consideration of external market data for similar positions, adjusted for Macy’s size, the scope of responsibilities and the uniqueness of the role.
 
Macy’s utilizes base pay ranges for the chief financial officer and executive levels below that position, based upon position and responsibilities and market and competitive data, as described above. The CMD Committee periodically reviews base pay ranges, most recently in fiscal 2006. The CMD Committee adopted new base pay ranges for fiscal 2007 to reflect the integration of 400 stores acquired in the May acquisition. Base salaries of the other Named Executives are managed individually without using a base pay range.
 
Following the close of the fiscal year, the CMD Committee, with input from the full Board, conducts an annual performance review for Mr. Lundgren. Mr. Lundgren conducts an annual performance review for the other Named Executives. The CMD Committee bases its decisions about whether to increase base salaries and, if so, by how much, on a number of factors, including those listed above and, for Mrs. Hoguet, the position of her salary within the base salary range established for the chief financial officer position. The CMD Committee reviews preliminary recommendations for annual increases at its February meeting and final recommendations at its March meeting. Annual increases in base salary normally take effect on April 1st of


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each year. In connection with the March 1 renewal of his employment agreement, Mr. Lundgren’s annual base salary increase became effective on March 1, 2007.
 
Fiscal 2007 Action:  Following the conclusion of fiscal 2006, management, with input from Mercer and Mr. Lundgren, prepared for the CMD Committee a summary of the current total compensation package for each Named Executive and a proposed total compensation package for fiscal 2007 for each that reflected recommended increases in base salaries. In conjunction with its consideration of these recommendations, the CMD Committee considered the contributions of each Named Executive to the advancement of the integration process related to the May merger, the increased size of the company following the May merger, the salaries of the Vice Chairs relative to that of Mr. Lundgren and to each other, and considered the other factors listed above with respect to each Named Executive. The CMD Committee also considered the results of its annual performance review of Mr. Lundgren and of Mr. Lundgren’s annual review of the individual performance of the other Named Executives.
 
Following its review, the CMD Committee approved the following base salary rate increases, effective March 1, 2007 for Mr. Lundgren and April 1, 2007 for the other Named Executives:
 
                 
    2007 Annual Increase in
 
    Base Salary Rate  
    $     % of Base Salary  
 
T. Lundgren
    100,000       7.1 %
K. Hoguet
    50,000       6.7 %
T. Cole
    75,000       8.3 %
J. Grove
    75,000       8.3 %
S. Kronick
    50,000       4.8 %
 

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