|
|
 | | | |
- close
- close
- close
- close
This excerpt taken from the SMG DEF 14A filed Dec 20, 2007. Setting
Compensation Levels for Other NEOs
The Compensation and Organization Committee intends to deliver
an appropriate level of total compensation to each of the NEOs
by evaluating and balancing the following objectives:
Consistent with our performance-oriented pay philosophy, the
compensation structure for the NEOs, other than the CEO, is
allocated to deliver about one-third of the annual compensation
opportunity in the form of fixed pay (i.e. base salary) and the
remaining two-thirds in the form of variable pay (short-term and
long-term incentives). This pay mix is generally in line with
the pay mix of our 2007 fiscal year compensation peer group.
Based on their assessment of the individual performance of each
NEO, the CEO and the Executive Vice President, Global Human
Resources, submit compensation recommendations to the
Compensation and Organization Committee for each NEO. These
recommendations incorporate all elements of compensation,
including base salary, annual incentive compensation,
equity-based compensation and perquisites. To evaluate the
compensation recommendations, the Compensation and Organization
Committee considers information such as the Company’s
financial performance as well as the compensation of similarly
situated executives as determined by reference to the benchmark
data for our 2007 fiscal year compensation peer group.
In general, the total direct compensation level, at target
levels of performance, for most of the NEOs, other than the CEO,
was between the
50th and
65th percentile
compared to the 2007 fiscal year compensation peer group. The
total direct compensation level for Mr. Sanders and for
Mr. Nagel, the former head of the Company’s North
America Consumer Business, were below the
50th percentile.
The Compensation and Organization Committee believes that the
total direct compensation for each of these individuals was
appropriate in view of the objectives noted above and that
variances from the target range versus the 2007 fiscal year
compensation peer group were the result of the fact that such
individuals were in their then current positions a relatively
short period of time.
For the 2007 fiscal year, 100% of the target incentive
compensation opportunity under the EMIP for the NEOs, other than
the CEO, was directly attributable to attainment of annual
performance measures as follows:
A description of the specific performance goals and the payout
levels associated with each performance measure are discussed
later in this CD&A and in the narrative accompanying the
Summary Compensation Table beginning on page 32 and the
narrative accompanying the Grants of Plan-Based Awards Table
beginning on page 38.
For the 2007 fiscal year, approximately 50% of the economic
value of the long-term equity-based compensation granted to the
NEOs, other than the CEO, was in the form of NSOs and the
remaining 50% was granted in the form of restricted stock. Both
the NSOs and the restricted stock are subject to three-year,
time-based cliff vesting. The Compensation and Organization
Committee’s decision to award a mix of NSOs and
restricted stock reflects a balance between rewarding the NEOs
for future share price appreciation while attempting to mitigate
the dilution to existing shareholders since a grant of
restricted stock requires considerably fewer common shares than
a grant of NSOs while delivering the same economic value,
measured as of the time of grant.
|
| |||||||
