Best Buy 2010 Annual Report Download - page 39

The fiscal 2010 Executive Officer STIP payment computations, based on the formula described above, were as follows:
Performance Metrics Total Payout
Operating Adjusted Domestic Market as a % of Eligible STIP Incentive
Income SG&A Share Salary(1) Earnings(2) Payment(3)
Mr. Dunn 132.8% +66.4% +110.7% =309.9% $966,669 $2,996,009
Mr. Muehlbauer 90% +45% +75% =210% 624,500 1,311,450
Ms. Ballard 90% +45% +75% =210% 650,001 1,365,002
Mr. Vitelli 75.6% +37.8% +63% =176.4% 559,653 987,228
Mr. Anderson 144% +72% +120% =336% 421,668 1,416,806
Mr. Pershing 46.8% +23.4% +39% =109.2% 414,002 452,090
Mr. Willett 90% +45% +75% =210% 850,003 1,785,007
(1) Total Payout as a % of Salary computed as the ‘‘Target Payout Percentage’’ noted above for each performance
metric multiplied by the respective Executive Officer STIP score.
(2) STIP eligible earnings are determined by taking the annual salary as of the 15th of each fiscal month, rather than
using actual paid fiscal year earnings.
(3) ‘‘STIP Incentive Payment’’ computed as the ‘‘Total Payout as a % of Salary’’ multiplied by the ‘‘Eligible Earnings’’
for each named executive officer.
Mr. Anderson was eligible for a prorated portion of the For fiscal 2010, the LTIP awards made to our eligible
Executive Officer STIP for the first four months of fiscal named executive officers were in the form of
2010 while he served as our Chief Executive Officer. non-qualified stock options that have a term of ten
Messrs. Pershing and Willett remained eligible for years and become exercisable over a four-year period at
participation in the Executive Officer STIP without the rate of 25% per year, beginning one year from the
proration for fiscal 2010. date of grant. The exercise price for such options was
equal to the closing price of our common stock on the
Long-Term Incentive. During fiscal 2010, we made grant date, as quoted on the NYSE. In addition, for
long-term incentive awards to our named executive fiscal 2010, we changed the frequency and timing of
officers, except for Messrs. Anderson and Wheway (see our LTIP awards and granted awards in June, September
Special Circumstances, beginning on page 40), and and January. Beginning in fiscal 2011, the LTIP awards
other eligible employees (typically, manager level and are being granted quarterly.
above) pursuant to our LTIP.
Our eligible named executive officers received their LTIP
Compensation mix is an important factor in determining awards in the form of stock options because we believe
the LTIP award amounts for our named executive stock options provide the maximum leverage and are
officers. The LTIP award amounts for the named the most efficient manner of focusing an executive
executive officers for fiscal 2010 were reviewed and officer’s interests on long-term performance and
approved by the Compensation Committee and were shareholder value creation. Because our stock price is
determined based upon the application of our Executive the performance measure, we believe that stock options
Compensation Framework. The annualized value of the are the best way to align our executive officers’ interests
fiscal 2010 LTIP award granted to each of our eligible with our shareholders’ interests and to drive
named executive officers was below the median of both performance intended to increase our stock price over
the Fortune 100 and our peer group. the four-year vesting period and ten-year option term.
We believe there is greater incentive to drive
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