This excerpt taken from the DTV DEF 14A filed Apr 27, 2007.
Compensation of Other Named Executive Officers
2006 Base Salary. Base salaries are reviewed annually with reference to compensation data provided by the Consultant and the terms and conditions of each executive officer's employment agreement. Messrs. Churchill's and Palkovic's 2006 salaries were determined by reference to the market data and the increases provided to other executives. Mr. Hunter's increase was based on the change in the CPI in New York City area per his employment agreement. Mr. Pontual's salary was pre-determined during negotiation of his employment agreement.
2006 Bonuses. The annual target bonus for each executive officer was determined in accordance with the respective employment agreement and is expressed as a percentage of base salary. The target percentage was developed with reference to compensation data of the peer group as provided by the Consultant when the employment agreements were approved. The bonuses for 2006 performance that were paid following the end of the year were determined as discussed at "2006 Annual Performance and Bonuses" beginning on page 27.
To determine the amount of the four other executives' 2006 annual performance-based bonuses, Mr. Carey indicated to the Committee that in addition to the cash flow performance goal that the Committee had set for the executive officers as a group, he had also set individual goals and objectives. In his assessment, each of the executive officers had met or exceeded those goals and objectives. As a consequence, he recommended that the Committee approve bonuses somewhat above the target bonus amounts that it had set at the beginning of the year and commensurate with overall Company performance, but less than the maximum funding amount permitted in the Bonus Plan.
2006 RSU Grants. The number of 2006 RSUs granted to each of the executive officers was determined with reference to the RSU grant structure that was developed in 2004, the Consultant's report on compensation and on recommendations provided by the Chief Executive Officer. Each executive officer received the same number of RSUs as in 2005, with the exception of Messrs. Palkovic and Hunter whose grants were increased as compared to 2005. Each executive officer's RSU grant had the same terms and conditions as all other management participants in the 2006 RSU program. These terms and conditions are discussed at "2006 RSU Program" on page 30.
2006 Incentive Compensation as Compared to Base Salary. The combined opportunity value of annual and long-term incentive compensation is set to exceed base salaries, that is, performance-based incentive compensation should exceed 50% of an executive's total direct compensation (base salary plus target bonus opportunity plus long-term incentive opportunity). As such, after the Committee approved the base salary, target bonus and target stock grant for each of the named executive officers for 2006, the combined target annual incentive bonus and target stock grant value amounted to approximately 57% to 78% of an executive officer's targeted total direct compensation. For purposes of this illustration, the Chief Executive Officer's 2004 RSU grant is assumed to have been made in four equal annual RSU grants and, for 2006, the grant date value per share would have been the same as the other executive officers.