and practices at other companies in our industry peer group. Determining the companies to use for this
comparison is a complex task. Because some of our competitors are not publicly traded, it is difficult to obtain
information about their specific executive positions that are comparable to those of our executives. With the help
of the Human Resources Department and FWC, the Compensation Committee has developed a peer group of
companies that it reviews. The Compensation Committee reviews the group annually and makes any necessary
adjustments. The peer group is comprised so that the median revenue size of the peer group is at or close to our
annual revenue. In fiscal 2011, the peer group consisted of the following 13 companies:
utilizes executive compensation surveys to benchmark comparable positions.
company's financial performance data. From this company-specific information as well as the surveys reviewed,
our Head of HR presented the data to the Compensation Committee by each compensation element. This data
provided visibility into how the compensation of each of our Named Executive Officers compared to his or her
peer group counterpart with respect to each compensation component and total compensation. The Compensation
Committee evaluated base salaries, target bonuses, actual bonuses, stock option awards, restricted stock awards,
and any other equity or incentive programs for which we could obtain data.
well as competitive with the compensation paid to comparable executives in our industry peer group.
information, surveys and other information he considers relevant, which includes information from FWC, to
determine the appropriate level and mix of incentive compensation for each Named Executive Officer and make
recommendations to the Compensation Committee, which also has access to the background material reviewed
by the CEO. The portion of an executive's total compensation that is contingent upon our performance tends to
increase commensurate with the executive's position within the Company. This approach is designed to provide
more upside potential and downside risk for executives in more senior positions.
to the extent practicable, with Section 162(m) of the Code. In fiscal 2010, upon recommendation of the
Compensation Committee, the Board of Directors adopted, and our stockholders approved, the Fossil, Inc. 2010
Cash Incentive Plan, which formalized our annual cash incentive award program and made it compliant with
Section 162(m) of the Code.