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This excerpt taken from the VLG DEF 14A filed Oct 2, 2006. COMPENSATION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company’s executive compensation program is
administered by the Nominating and Compensation Committee of the
Board of Directors, which is comprised of two non-employee
directors and one employee director. The Nominating and
Compensation Committee works with management to develop
compensation plans for the Company and is responsible for
determining the compensation of each executive officer and
recommending such compensation to the Board of Directors.
The Company’s executive compensation program is designed to
align executive compensation with the Company’s business
objectives and the executive’s individual performance and
to enable the Company to attract, retain and reward executive
officers who contribute, and are expected to continue to
contribute, to the Company’s long-term success. In
establishing executive compensation, the committee is guided by
the following principles: (i) the total compensation
payable to executive officers should be sufficiently competitive
with the compensation paid by competitive companies for officers
in comparable positions so that the Company can attract and
retain qualified executives and (ii) individual
compensation should include components which reflect both the
financial performance of the Company and the performance of the
individual.
The compensation of the Company’s executive officers
consists of a combination of base salary, bonuses and
equity-based compensation. In general, the Company’s
compensation program attempts to limit increases in salaries and
favors bonuses based on revenues, operating profit, earnings per
share and individual merit. The Nominating and Compensation
Committee believes that executive compensation should be
designed to motivate executives to increase shareholder value
and further believes that executive officers can best increase
shareholder
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value by managing the revenues, operating profit and earnings
per share of the Company and by conceiving, developing and
positioning the leading products and services in the
Company’s chosen markets.
Compensation payments in excess of $1 million to the Chief
Executive Officer or other executive officers are subject to a
limitation of deductibility for the Company under
Section 162(m) of the Internal Revenue Code of 1986, as
amended. Certain performance-based compensation is not subject
to the limitation on deductibility. The committee does not
expect cash compensation to its Chief Executive Officer or any
other executive officer in the foreseeable future to be in
excess of $1 million.
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