SMMX » Topics » Setting Executive Compensation

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

Setting Executive Compensation

Based on the foregoing objectives, the Compensation Committee has structured the Company’s annual and long-term incentive-based cash and non-cash executive compensation to motivate executives to achieve the business goals set by the Company and reward the executives for achieving such goals. The Company benchmarks salaries against the Radford Benchmark (Technology), Executive, Sales, Benefits, Global Life Sciences (Biotech) and International surveys. Radford is a leading International survey company, based in San Jose, California. Radford’s suite of global surveys includes more than two million incumbents and offers current data to 2,000+ clients.

The Compensation Committee has also engaged Compensia, Inc., an outside human resources consulting firm, to conduct an annual review of its total compensation program for its executive officers. Compensia, Inc. provides the Compensation Committee relevant market data and alternatives to consider when making compensation decisions for executive officers and when assessing the recommendations being made by the Company’s management for executives.

In making compensation decisions and recommendations, the Compensation Committee compares each element of total compensation against the Radford survey data and a peer group of publicly-traded, similarly-sized technology and life science companies and also to regional technology and life science companies which we consider to be labor market competitors (collectively, the “Compensation Peer Group”). The Compensation Committee periodically reviews and updates the Compensation Peer Group, which consists of companies against which the Compensation Committee believes the Company competes for talent and for stockholder investment.

Because the Company competes with many larger companies for top executive-level talent, the Compensation Committee thus generally sets compensation for executive officers at the 75th percentile of compensation paid to similarly-situated executives of the companies comprising the Compensation Peer Group. Variations to this objective may occur as dictated by the experience level of the individual and market factors.

A significant percentage of total compensation is allocated to incentives as a result of the philosophy mentioned above. There is no pre-established policy or target for the allocation between either cash and non-cash or short-term and long-term incentive compensation. Rather, the Compensation Committee reviews information provided by Compensia, Inc. to determine the appropriate level and mix of incentive compensation. Income from such incentive compensation is realized as a result of the performance of the Company or the individual, depending on the type of award, compared to established goals.

"Setting Executive Compensation" elsewhere:

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