This excerpt taken from the DIS DEF 14A filed Jan 11, 2006.
Minimum salaries for five of the six executive officers named in the Summary Compensation Table are determined by employment agreements for these officers. These minimum salaries, the amount of any increase over these minimums, and salaries for executive officers whose salaries are not specified in an agreement are determined by the Compensation Committee based on a variety of factors, including:
Where not specified by contract, salaries are generally reviewed annually.
In setting salaries, the Committee considers the importance of placing a high proportion of executive officers compensation at risk in the form of the annual bonus, which is tied to both Company performance measures and individual performance, as well as long-term stock-based compensation, which is tied to Company stock price performance and, for senior executives, performance compared to an external peer group.