This excerpt taken from the DTV DEF 14A filed Apr 27, 2007.
Setting 2006 Executive Officer Compensation
In making its decisions on an individual executive's compensation, the Committee reviews the nature and scope of the executive officer's responsibilities as well as his effectiveness in supporting the Company's long-term goals. For 2006, the Committee reviewed total compensation of each named executive officer and the value of
The Committee evaluates the executive officer compensation levels each year. The Consultant obtains compensation market data from proxy reports of the peer companies. The Consultant
supplements that proxy data with compensation survey information on base salaries, annual bonuses and long-term incentive compensation that is gathered from companies that have similar revenues as the Company and are in related industries. The Committee uses the survey information to provide a broader view of compensation practices and levels as compared to the data provided by the proxies of peer companies.
The Committee discussed the Consultant's findings and recommendations and took such information into consideration in determining 2006 compensation to the named executive officers.
In setting the levels of targeted compensation, the Committee reviews prior incentive bonuses and prior stock awards, which represent compensation for past achievements, to assist the Committee in determining the executive's pay levels as compared to the objectives. The Committee does not limit current bonus opportunities or stock award opportunities based on previously accumulated compensation because it believes that an executive's incentive compensation should be linked to the executive's and Company's current and future performance and not based on accumulated compensation and incentive awards for past achievements.
The Committee set 2006 target compensation for the executive officers as shown in 2006 Supplementary Table 3 and as discussed in the following narrative. The actual bonus amount shown is the bonus that the Committee determined after the end of 2006 and its assessment of Company and individual executive performance and is the amount shown in column (e) of the Summary Compensation Table on page 34.