Best Buy 2009 Annual Report Download - page 37

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Long-Term Incentive. Pursuant to our LTIP, established incentive awards to 20 of our senior officers, including
under the Omnibus Plan, we make annual long-term Messrs. Dunn, Muehlbauer, Willett and Morrish, and
incentive awards to our named executive officers and Ms. Ballard. The purpose of the award was to provide
other eligible employees (typically, manager level and additional incentive to achieve specified revenue and
above). For fiscal 2009, our named executive officers profit growth for the company and to retain our key
received their LTIP award in the form of stock options. executives needed to deliver those results. This award
However, Mr. Anderson requested that he not be was in the form of performance shares, with each
granted a long-term incentive award and that his performance share representing, at the time of vesting,
options to purchase shares that he would have received the right to receive one share of common stock. The
be contributed to a discretionary award pool to be award is based on the following metrics:
distributed to employees who are not otherwise eligible • Compound annual revenue growth rate
to receive LTIP awards. For fiscal 2008, our named
• Compound annual profit growth rate
executive officers were able to select from among four
long-term incentive mix choices, which included • Compound annual comparable store sales
combinations of stock options, restricted stock and growth rate
performance-based awards that are settled in stock or
There are two separate, but partially overlapping,
cash (our ‘‘LTIP Choice’’ feature). For fiscal 2009, we
performance periods covered by the awards. The first
awarded our officers stock options only. We believe that
period began on June 1, 2008, and ends on
stock options are the best way to align our officers’
February 26, 2011 (end of fiscal 2011). The second
interests with our shareholders’ interests and to drive
period also began on June 1, 2008, but ends on
performance intended to increase our stock price. The
March 3, 2012 (end of fiscal 2012). One-half of the
LTIP award amounts for the named executive officers
total award opportunity is available with respect to each
were reviewed and approved by the Compensation
performance period.
Committee. The stock options we issue to our named
executive officers are non-qualified stock option awards The number of performance shares earned at each
that have a term of 10 years and become exercisable vesting date, as set forth below, will be determined
over a four-year period at the rate of 25% per year, based on application of the following formula:
beginning one year from the date of grant. The stock Award Percentage of Target Comparable Store Sales
option exercise price is equal to the closing price of our Factor = Final Award
common stock on the grant date, as quoted on the
NYSE. Award Percentage of Target will be determined based on
the following table:
Additional information regarding LTIP awards granted to
Messrs. Dunn, Muehlbauer, Willett and Morrish and Revenue Growth Rate
Profit Growth Rate <7% 7% 14% 20%
Ms. Ballard in fiscal 2009 is included in Grants of
24% 0% 135% 165% 200%
Plan-Based Awards on page 45. Due to Mr. Morrish’s
17% 0% 80% 100% 120%
voluntary separation from the company, his LTIP award
7% 0% 0% 20% 25%
was forfeited.
<7% 0% 0% 0% 0%
Enterprise Leadership Long-Term Incentive. In fiscal
2009, we granted enterprise leadership long-term
37