This excerpt taken from the VLG DEF 14A filed Oct 2, 2006.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Companys 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 Companys executive compensation program is designed to align executive compensation with the Companys business objectives and the executives 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 Companys 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 Companys executive officers consists of a combination of base salary, bonuses and equity-based compensation. In general, the Companys 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
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 Companys 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.