Dell 2006 Annual Report Download - page 134

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Table of Contents
the financial performance objectives were revenue growth and operating income margin objectives, as follows:
Threshold Target Maximum
Revenue Growth 5.0% 10.0% 20.0%
Operating Income Margin 7.0% 7.8% 8.6%
Results — For Fiscal 2007, we did not achieve either revenue growth or operating income margin at the threshold level.
Consequently, the committee set the corporate performance modifier at 0%, the other modifiers were not applied, and the
formulaic payout results were zero.
Regional/Business Unit and Individual Performance — After the corporate performance modifier is set, the following
additional modifiers are applied to determine individual payout amounts:
• Performance of the executive's regional/business unit; and
• A subjective evaluation of each executive's individual performance and contribution during the year.
Each of these factors can result in further modification of the executive's payout as indicated. Upward adjustments must be
offset by downward adjustments for other executives, as the aggregate payouts cannot exceed the total amount funded and
approved by the Leadership Development and Compensation Committee based on corporate performance. As mentioned
above, the regional/business unit and individual performance modifiers were not applied for Fiscal 2007 as we did not meet
the corporate performance thresholds.
Strategic Priorities Targets — The Leadership Development and Compensation Committee has the discretion to adjust the
formulaic payout results based on company performance against specific strategic priorities established for the year. For
Fiscal 2007, these included objectives in the areas of Customer Experience, Winning Culture, and Global Growth.
Fiscal 2007
Strategic Initiatives(a) Fiscal 2007 Goal Fiscal 2007 Results
Customer Experience:
Customer Satisfaction score 90% Positive 75% Positive
Online Customer Satisfaction score 90% Positive <90% Positive
Winning Culture:
All Tell Dell Metrics >75% Positive 76% Positive
Leadership Imperative Participation 100% 88%
Global Growth(b)
(a) The committee believes that the performance objectives established for each of these strategic initiatives represent meaningful improvements
for the organization and, therefore, are reasonably difficult to attain.
(b) Management believes, and the committee concurs, that the specific strategic initiatives and performance goals established for the "Global
Growth" strategic priority during Fiscal 2007 represent confidential business information, the disclosure of which would result in meaningful
competitive harm.
Based on the results described above, the Leadership Development and Compensation Committee did not adjust the
formulaic payout results, and no annual incentive payments were made to the executive officers.
Long-Term Incentives
Design — Long-term incentives are the most significant element of total executive officer compensation. Performance-
dependent components of compensation comprise much of this element, consistent with our philosophy of driving
performance and thereby aligning the interests of executives with other stockholders. These incentives are designed to
motivate executive officers to improve financial performance and stockholder value, as well as encouraging the long-term
employment of the executive officers. These incentives include a variety of stock and cash vehicles, such as:
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