This excerpt taken from the SMG DEF 14A filed Dec 20, 2006.
Compensation of the CEO
The Compensation and Organization Committee establishes the annual goals and objectives relevant to the CEOs compensation. The Compensation and Organization Committee evaluates the CEOs performance against these goals and objectives annually in executive session.
The Companys executive compensation program is designed with a performance orientation, with a large portion of executive compensation being at risk. Consistent with the overall goal of the executive compensation program, Mr. Hagedorn declined an increase to his annual base salary for the 2006 fiscal year, and as such, his base salary remained at $600,000, below the 25th percentile of the Comparison Group. Mr. Hagedorns total compensation is more heavily weighted towards equity-based incentive compensation. Mr. Hagedorns target incentive opportunity under the Executive Incentive Plan was 90% of his base salary for the 2006 fiscal year. In Mr. Hagedorns position, 100% of his target incentive opportunity is directly attributable to attainment of annual performance measures established for the Company on a consolidated basis. The measures used to determine Mr. Hagedorns incentive compensation are the same as for all corporate officers described above. Mr. Hagedorns overall compensation package is set at the median of the Comparison Group and is structured in a way to provide significant rewards when the Company exceeds the corporate performance goals.