This excerpt taken from the GWW DEF 14A filed Mar 16, 2007.
NEOs, along with approximately 1,400 other managers, participate in the Management Incentive Program (MIP), which provides for annual cash incentives based on the achievement of specified annual Company-wide financial performance measures and individual performance. The Company structures the MIP to motivate performance that balances short-term and long-term results and aligns the interests of management with shareholders. The Company believes that this annual incentive program design encourages performance that creates long-term shareholder value. For 2006, MIP was based on return on invested capital (ROIC), year-over-year sales growth and the individual executive's performance. ROIC reflects how effectively management uses Company assets and is generally defined by the Company as pre-tax operating earnings divided by net working assets. The total MIP payout is calculated as follows: