RNOW » Topics » Compensation Discussion and Analysis

This excerpt taken from the RNOW DEF 14A filed Apr 21, 2009.

Compensation Discussion and Analysis

        The following discussion and analysis of our compensation practices and related compensation information should be read in conjunction with the Summary Compensation table and other tables included in this proxy statement, as well as our financial statements and management's discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008. The following discussion includes statements of judgment and forward-looking statements that involve risks and uncertainties. These forward-looking statements are based on our current expectations, estimates and projections about our industry, our business, compensation, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words and include, but are not limited to, statements regarding projected performance and compensation. Actual results could differ significantly from those projected in the forward-looking statements as a result of certain factors, including, but not limited to, the risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008. We assume no obligation to update the forward-looking statements or such risk factors.

This excerpt taken from the RNOW DEF 14A filed Apr 22, 2008.

Compensation Discussion and Analysis

        The following discussion and analysis of our compensation practices and related compensation information should be read in conjunction with the Summary Compensation table and other tables included in this proxy statement, as well as our financial statements and management's discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. The following discussion includes statements of judgment and forward-looking statements that involve risks and uncertainties. These forward-looking statements are based on our current expectations, estimates and projections about our industry, our business, compensation, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words and include, but are not limited to, statements regarding projected performance and compensation. Actual results could differ significantly from those projected in the forward-looking statements as a result of certain factors, including, but not limited to, the risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. We assume no obligation to update the forward-looking statements or such risk factors.

This excerpt taken from the RNOW DEF 14A filed Apr 27, 2007.

Compensation Discussion and Analysis

The following discussion and analysis of our compensation practices and related compensation information should be read in conjunction with the Summary Compensation table and other tables

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included in this proxy statement, as well as our financial statements and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006. The following discussion includes statements of judgment and forward-looking statements that involve risks and uncertainties. These forward-looking statements are based on our current expectations, estimates and projections about our industry, our business, compensation, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “ estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words and include, but are not limited to, statements regarding projected performance and compensation. Actual results could differ significantly from those projected in the forward-looking statements as a result of certain factors, including, but not limited to, the risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006. We assume no obligation to update the forward-looking statements or such risk factors.

Introduction

It is the responsibility of the compensation committee of our board of directors to oversee RightNow’s general compensation policies; to determine the base salary and bonus to be paid to RightNow’s chief executive officer; and to make recommendations to the board of directors with respect to the base salary and bonuses to be paid each year to RightNow’s executive officers other than the chief executive officer. In addition, the compensation committee administers RightNow’s 2004 Equity Incentive Plan with respect to stock option grants and direct stock issuances made to the executive officers. The three broad components of RightNow’s executive officer compensation are base salary, cash incentive awards, and long term equity-based incentive awards. The compensation committee periodically reviews total compensation levels and the allocation of compensation among these three components for each of the executive officers in the context of RightNow’s overall compensation policy. Additionally, the compensation committee reviews the relationship of executive compensation to corporate performance and relative stockholder return. After approving the overall compensation packages, including option grants, provided to each of RightNow’s executive officers, the compensation committee makes a recommendation to the board of directors to accept such approval. The compensation committee believes that RightNow’s current compensation plans are competitive and reasonable. Below is a description of the general policies and processes that govern the compensation paid to RightNow’s executive officers, as reflected in the accompanying compensation tables.

General Compensation Philosophy

We operate in a highly competitive and rapidly changing segment within the high-technology industry. The compensation committee believes that our compensation programs for executive officers should: a) be designed to attract, motivate and retain talented executives responsible for our success, b) be determined to be competitive, c) reward individuals based on the achievement of designated financial targets, individual contribution, and financial performance relative to that of our competitors and market indices. Within this philosophy, the committee’s objectives are to:

·       Offer a total compensation program that takes into consideration the compensation practices of other high technology companies of similar size with which we compete for executive talent;

·       Provide annual cash incentive awards that take into account our overall financial performance in terms of designated corporate objectives; and

·       Strengthen the alignment of the interests of executive officers with those of stockholders by providing significant equity-based, long-term incentive awards.

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Compensation Components and Process

The compensation committee’s conclusions on the compensation levels for the executive officers are based in part on executive compensation data drawn from nationally recognized surveys. When evaluating market data for compensation comparison purposes, the committee seeks to obtain data from organizations considered to be comparable from a variety of perspectives, in order to ensure comparisons include both relevant labor market for talent as well as business competitors. For 2006, the compensation committee engaged Towers Perrin, a nationally recognized compensation consulting company, to provide data on market compensation levels for executives in comparable positions at comparable companies. Our compensation committee members interact directly with representatives from Towers Perrin. Our chief financial officer, Susan Carstensen, may act as a liaison between our compensation committee and Towers Perrin and communicates to Towers Perrin any requests made by our compensation committee for additional or refined information.

For market data on cash compensation, which includes base salary and the annual cash incentive, published survey data were considered from two sources: 1) the Culpepper 2005 Compensation Survey, scoped to include companies of comparable industries, companies of similar size, and companies in similar geographic regions; and 2) Watson Wyatt’s 2005/2006 Industry Report on Top Management Compensation, which data was regressed at $100 million in annual sales to correlate with the approximate size of RightNow.

Information on long-term incentive compensation was obtained from Towers Perrin’s Long-Term Incentive database of companies with less than $500 million in revenue (which was the smallest available subset of information). The long-term incentives are expressed as a percentage of base salary. The long-term incentives obtained were added to the cash compensation information from each survey to arrive at an estimate of total compensation, and the totals from both surveys were averaged to arrive at an overall market estimate of total compensation.

In addition, information was obtained from public filings of approximately 50 other high-technology companies with similar annual sales revenue to provide another data point in determining market for total compensation. The combination of published survey data and data from the proxy filings of peer companies, we believe, allows RightNow to assess relevant external market pay practices, and to understand the range of pay practices occurring in the market. These external market pay practices help inform the organization on the competitiveness of its pay programs.

The compensation committee considered executive compensation at its meetings held on December 1, 2005 and January 19, 2006. The material considered by the compensation committee also included the historical compensation and stock option awards made to each of our executive officers. As described in more detail below, the results of each executive’s annual performance development plan, including a comparison of performance and job description relative to achievement and potential, were reviewed and discussed.

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