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Investor Relations

SEC Filings

GRAHAM HOLDINGS CO filed this Form DEF 14A on 03/31/1994
Entire Document
to key management and professional employees, including the Company's executive
officers, who have made or are in a position to make significant contributions
to the profitability of the Company and enhance shareholder value. Each plan is
administered by the Compensation Committee.
Annual Bonus Plan
     The Company's Annual Incentive Compensation Plan provides for annual
incentive compensation awards based on the Company's and its business units'
short-term, i.e., annual, financial performance. At the end of 1992, the
Compensation Committee approved a range of incentive payouts for 1993 keyed to
performance against specified goals related to budgeted operating income, cash
flow or earnings per share, which vary by business unit. In 1993 the Company
exceeded its budgeted earnings per share goal and each of its business units
exceeded the threshold level of operating income required for earning bonus
awards and, in the case of the cable division, the budgeted cash flow required
for earning bonus awards. Mr. Graham waived participation in the Annual
Incentive Compensation Plan with respect to 1993. Awards to the other executives
whose compensation is detailed in this proxy statement are shown in the column
headed "Bonus" in the Summary Compensation Table shown on page 13.
Long-Term Plan
     To balance the Annual Incentive Compensation Plan, which is intended to
reward short-term financial performance, the Company's Long-Term Incentive
Compensation Plan (the "Long-Term Plan") provides incentives for improved
financial performance over periods of Award Cycles (which beginning in 1983 have
consisted, and are expected to continue to consist, of four-year periods
starting at two-year intervals).
     Performance Units.
     In December 1988, when Performance Units for the 1989-92 Award Cycle were
awarded, the Compensation Committee adopted a formula that made the payout value
of such Units depend on how the Company's rate of growth of earnings per share
during the Cycle would ultimately compare with the average rate of growth in
earnings per share of some 21 other media companies during approximately the
same period and also on achievement of a targeted average annual return on
equity. In December 1992, the Compensation Committee estimated that the
Company's compound rate of growth in earnings per share during the 1989-92
period will exceed the rate of growth of all but six of the other media
companies. Furthermore, the Compensation Committee estimated that the average
annual return on equity would exceed the minimum required average annual target
of 14% for Award Cycles prior to the 1991-94 Award Cycle. Acting in accordance
with the formula adopted at the beginning of the 1989-92 Award Cycle, the payout
value of the Performance Units awarded for that Cycle was estimated to be $83
per Unit, inasmuch as the average annual return on equity did not meet the level
required to receive the maximum award under the Long-Term Plan. The Compensation
Committee directed that 75% of the estimated value of the Performance Units
awarded for the 1989-92 Award Cycle be paid to Plan participants in December
1992, with the remaining 25% to be paid in 1993 pending final reporting of