Exhibit 10.1
Trex Company, Inc.
Description of Management
Compensatory Plans and Arrangements
Components of Executive
Compensation
In accordance with the rules of the
New York Stock Exchange, all components of compensation for the
chief executive officer and other executive officers of Trex
Company (the “Company”) are determined by the
compensation committee of the board of directors, all of whom meet
the independence requirements prescribed by such rules.
The Company’s executive
compensation program includes a base salary, annual cash bonuses
and long-term incentive compensation in the form of stock
appreciation right awards and restricted shares issued under the
Trex Company, Inc. 2005 Stock Incentive Plan (the “Stock
Incentive Plan”).
Base Salary.
Base salaries are the only
non-variable element of the Company’s total compensation.
They reflect each executive officer’s responsibilities, the
impact of each executive officer’s position, and the
contributions each executive officer delivers to the Company.
Salaries are determined by competitive levels in the market for
executives with comparable responsibilities and job scope based on
the Company’s peer group and the results of executive
compensation surveys, as well as the Company’s internal
equity considerations. Each year, at its February meeting, the
compensation committee reviews and establishes the base salaries of
the Company’s executive officers. Salary increases, if any,
are based on individual performance, market conditions and Company
performance. To gauge market conditions, the compensation committee
evaluates the peer group and market data compiled by its
consultant. Base salaries are set upon review of the peer group and
market data provided to t
