NEU » Topics » Base Salary

This excerpt taken from the NEU DEF 14A filed Mar 13, 2009.

Base Salary

Our base salary structure is designed to encourage internal growth, attract and retain new talent, and reward strong leadership that will sustain our growth and profitability. We seek to pay salaries within the 50th percentile for peer group companies and have historically found that maintaining salaries within a 15% range of that percentile allows us to retain our existing executives and hire the desired caliber of new talent when required. The base salary for each named executive officer reflects our past and current operating profits, the named executive officer’s individual contribution to our success throughout his career, internal pay equity and market data regarding comparable positions within peer group companies. In determining and setting base salary, the Committee considers all of these factors, though it does not assign specific weights to any factor.

Our annual review of market data regarding compensation paid by the peer group companies revealed that the median base salaries of our named executive officers for 2008 ranged between 78% and 98% of the median base salary for executives in comparable positions. In 2008, the named executive officers received median raises in salary of 3.8%. Overall, the salary increases fell within the 2008 merit increase guidelines for rewarding performance based upon the accomplishment of the goals and objectives established at the beginning of the year. The Committee generally considers revisions to base salary for each named officer one year after the last change to base salary for that officer.

In December 2008, Frederic W. Cook & Co. provided the Committee comparative market data on compensation practices and programs of competitors and companies of comparable size. According to the analysis done by Frederic W. Cook & Co., the total cash compensation of Mr. Thomas E. Gottwald was below the median of competitors and companies of comparable size. As a result and in accordance with the Committee’s objective of paying executive total cash compensation near the 50th percentile of peer group companies, the Committee approved 2008 total cash compensation (bonus and salary) of $1,125,000 for Mr. Gottwald.

This excerpt taken from the NEU DEF 14A filed Mar 11, 2008.

Base Salary

Our base salary structure is designed to encourage internal growth, attract and retain new talent, and reward strong leadership that will sustain our growth and profitability. We seek to pay salaries within the 50th percentile for peer group companies and have historically found that maintaining salaries within a 15% range of that percentile allows us to retain our existing executives and hire the desired caliber of new talent when required. The base salary for each named executive officer reflects our past and current operating profits, the named executive officer’s individual contribution to our success throughout his career, internal pay equity and market data regarding comparable positions within peer group companies. In determining and setting base salary, the Committee considers all of these factors, though it does not assign specific weights to any factor.

Our annual review of market data regarding compensation paid by the peer group companies revealed that the average base salaries of our named executive officers for 2007 ranged between 69% and 99% of the median base salary for executives in comparable positions. In 2007, the named executive officers received average raises in salary of 4.2%. Overall, the salary increases fell within the 2007 merit increase guidelines for rewarding performance based upon the accomplishment of the goals and objectives established at the beginning of the year. The Committee generally considers revisions to base salary for each named officer one year after the last change to base salary for that officer. In November 2007, the Committee raised the salary of Bruce Hazelgrove to $265,600 effective January 1, 2008 in accordance with the Committee’s objective of paying executive salaries near the 50th percentile of peer group companies. Mr. Hazelgrove’s previous base salary was below the 25th percentile of peer group companies used for 2007 compensation.

In December 2007, Frederic W. Cook & Co. provided the Committee comparative market data on compensation practices and programs of competitors and companies of comparable size. The peer group discussed above was modified by eliminating companies that were no longer in existence due to merger activity or inappropriate from a size perspective (Albemarle Corporation, FMC Corporation and Ferro Corporation) and adding companies similar to us in terms of size or industry (H.B. Fuller Company, Innospec Inc., The Lubrizol Corporation, and Stepan Company). Frederic W. Cook also advised the Committee on industry best practices. According to the analysis done by Frederic W. Cook & Co., the salary of Mr. Thomas E. Gottwald was below the 25% percentile of competitors and companies of comparable size. As a result and in accordance with the Committee’s objective of paying executive salaries near the 50th percentile of peer group companies, the Committee raised Mr. Gottwald’s salary to $650,000 effective January 1, 2008.

This excerpt taken from the NEU DEF 14A filed Mar 29, 2007.

Base Salary

With our base salary structure, we strive to provide salaries that encourage internal growth, attract new talent and reward strong leadership that will sustain our growth and profitability. We seek to pay salaries within the 50th percentile for peer group companies and have historically found that maintaining salaries within a 15% range of that percentile allows us to retain our existing executives and hire the desired caliber of new talent when required. These peer group companies include some of the companies listed on the Standard & Poor’s 1500 Specialty Chemical Index. The base salary for each named executive officer reflects our past and current operating profits, the named executive officer’s individual contribution to our success throughout his career, internal pay equity and market data regarding comparable positions within peer group companies. In determining and managing base salary, the Committee considers all of these factors, though it does not assign specific weights to any factor.

 

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Our annual review of market data regarding compensation paid by the peer group companies revealed that the average base salaries of our named executive officers for 2005 fell between 79% and 98% of the median base salary for executives in comparable positions. In 2006, the named executive officers other than the Chief Executive Officer received average raises in salary of 3.6%, while the Chief Executive Officer received a 5% raise. The Chief Executive Officer’s salary is 21% below the median base salary for peer group companies. While this salary falls below the established target of the +/- 15% range of the median, it is consistent with managing compensation over an executive’s entire career. Overall, the salary increases fell within the 2006 merit increase guidelines for rewarding performance based upon the accomplishment of the goals and objectives established at the beginning of the year.

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