This excerpt taken from the PNRA DEF 14A filed Apr 13, 2006.
Components of Compensation
There are two primary components to the compensation of our executive officers: annual cash compensation (consisting of salary and bonus incentives) and long-term incentive compensation.
Annual Cash Compensation. Each executive officers compensation consists of a base salary and a bonus. The individuals base salary is designed to be competitive with companies of a similar size in our industry while taking into account the strengths and talents of the individual officer. In fiscal 2005, the executive officers other than Mr. Shaich received an average salary increase of 16%. An officers bonus is based on his or her performance against individual goals, operating group performance and other subjective criteria as well as overall Company performance with a target bonus generally in the range of 30% to 50% of the individuals base salary with a potential bonus opportunity of twice the amount of the targeted percentage. For fiscal 2005, the executive officers in office at year-end other than Mr. Shaich had an average target bonus of 37% of base salary and received an average cash bonus of 117% of that target bonus.
Thus, our cash compensation practices seek to motivate executives by requiring excellent performance measured against both internal goals and competitive performance.
Long-Term Incentive Compensation. The second element of executive compensation is long-term incentive compensation, which was awarded for fiscal year 2005 under the 2005 LTIP. Currently, the Chief Executive Officer recommends, and the Compensation Committee grants, awards under the 2005 LTIP. The awards under the 2005 LTIP depend on the executives position and performance as well as his or her overall compensation package compared to companies of a similar size in our industry. In fiscal 2005, the executive officers other than Mr. Shaich received an average award under the 2005 LTIP comprised of restricted stock awards for 1,945 shares, stock option awards to purchase 8,291 shares and performance target awards of $140,000.
Other Compensation. The Compensation Committee also considers the value of the annual compensation for each of the Companys executive officers and all executive officers as a group. Generally, this compensation consists of matching contributions to the Companys 401(k) plan, life insurance premiums, relocation reimbursements, chartered air travel and other forms of compensation. For the Companys named executive officers, these items are summarized in the summary compensation table and the notes to that table. The actual value realized for these other forms of compensation may differ materially from the amounts set forth in the table. Our executive officers are also entitled to participate in our employee stock purchase plan and other benefit plans.