Dell 2006 Annual Report Download - page 138

Table of Contents
total remuneration for executives in industries similar to ours and that providing such benefits is important to delivering a
competitive package to retain executive officers. Specific perquisites and benefits include:
Deferred Compensation Plan — We maintain a nonqualified deferred compensation plan that is available to all Dell
executives. For a description of the terms of this plan, as well as information about the account balances held by each of the
Named Executive Officers, see "Other Benefit Plans — Deferred Compensation Plan" below.
Financial counseling and tax preparation services — Each executive officer is entitled to reimbursement, up to $12,500
annually, for financial counseling services (including tax preparation). Actual costs are reimbursed, and the income is
imputed to the executive officer for federal income tax purposes.
Annual physical — We pay for a comprehensive annual physical for each executive officer and his or her spouse and
reimburse for associated travel and lodging, all subject an annual maximum of $5,000 per person.
Technical Support — We provide our executive officers with technical support (personal and business) and, in some cases,
certain home network equipment. The incremental costs of providing these services is limited to the cost of hardware
provided and is insignificant.
Other — The executive officers participate in our other benefit plans on the same terms as other employees. These plans
include medical, dental, and life insurance benefits; our 401(k) retirement savings plan; and our employee stock purchase
plan. See "Other Benefit Plans" below.
Stock Ownership Guidelines
The Board has established stock ownership guidelines for themselves and our executive officers to more closely link their
interests with those of other Dell stockholders. Under those guidelines, non-employee directors must maintain ownership of
Dell common stock having an aggregate value equal to at least 300% of their annual retainer, the Chairman and Chief
Executive Officer must maintain ownership of stock having an aggregate value equal to at least 500% of base salary, and all
other executive officers must maintain ownership of stock having an aggregate value equal to at least 400% of base salary.
A person has three years after becoming subject to the guidelines to attain the specified minimum ownership position.
Unvested restricted stock or stock units may be used to satisfy these minimum ownership requirements, but unexercised
stock options may not. We believe these ownership guidelines to be in line with the prevalent ownership guidelines among
our recognized peer companies.
Compliance with these guidelines is evaluated once each year using the average closing price of Dell common stock during
the previous fiscal year. As of the last evaluation in May 2007, all directors and executive officers met their ownership
requirements.
Administration of Compensation Plans
The Leadership Development and Compensation Committee approves every compensation action for executive officers,
including equity awards, which are effective on the day of approval. In addition, the committee annually conducts a
comprehensive review of all compensation and benefit plans for the company, with a view to ensuring compliance, fairness,
cost competitiveness, and adherence to our pay-for-performance philosophy. While the committee was expecting better
company performance in the past year, it is confident that the executive officers reaped rewards commensurate with their
individual and Dell's overall performance.
Employment Agreements, Severance, and Change-in-Control Arrangements
Substantially all of Dell's employees enter into a standard employment agreement upon commencement of their
employment. The standard employment agreement primarily addresses intellectual property and confidential and proprietary
information matters and does not contain provisions regarding compensation or continued employment.
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