This excerpt taken from the JWN DEF 14A filed Apr 9, 2009.
The annual bonus opportunity for the Named Executive Officers is defined as a percentage of base salary. For fiscal year 2008, the Committee maintained the prior years opportunity, as follows, because it continued to meet the expectations for performance-based compensation:
The target bonus opportunity for the Named Executive Officers is somewhat lower than what we have seen in our peer companies in the past. However, the 2.5 times target maximum potential is greater than the 2.0 times target maximum that is common among large employers. Based on our pay-for-performance philosophy, we would prefer to be more conservative on target bonus opportunity as a percent of base salary and allow for continued rewards at the truly superior performance levels to encourage positive results.
The range of possible payouts for fiscal year 2008 performance under the Executive Management Group Bonus Plan is shown in the Grants of Plan-Based Awards in Fiscal Year 2008 table, footnote (b), on page 48.