Given our performance-based compensation program, our Chief Executive Officer's compensation in 2013 was significantly below that of 2012, primarily due to a 42% reduction in short-term incentive compensation. This reduction was driven by the company falling below all three of its targets measures as more fully described below. In addition, in response to our reduced financial performance, long-term incentive awards were significantly below target levels, as has been the case each year since the economic downturn in 2008.

As part of its year-end process, the committee approved the payment of 2013 short-term non-equity incentive (annual bonus) wards. The committee noted that the company fell below all three target measures. Each measure was comprised of two or more components which were weighted and scored baed on 2013 results as follows:

Distribution effectiveness, as measured by net sales (exceeding closed products), and new product effectiveness: Net sales (excluding closed products) of a negative $6.9 billion and new product effectiveness of $0.1 billion fell far below our thresholds and resulted in zero scoring out of a 33% target score for this component.

Portfolio performance, as measured by rankings and ratings of the Calamos mutual funds relative to their peer group: Compared to peer rankings over the one-, three-, and five- year periods, 40% of our funds placed in the top half of their peer rankings compared to the target of 70%; asset-weighted percentile rankings over the one-, three- and five-year periods of 48.2% compared to the target of the top 40%; and 58% asset-weighted percentile rankings over one year for certain of our funds compared to a 40% target, producing a combined portfolio performance score of 26% out of a target score of 34% for this component; and

Financial performance, as measured by non-GAAP earnings per share and operating margin: The company fell just below its target measure of Non-GAAP earnings per share and fell below its threshold measure for operating margin. Non-GAAP earnings per share of $0.92 compared to a target of $1.00 and operating margin of 28.9% compared to a target of 29.0% resulted in a score of 16.1%; below the 33% target score for this component.

Combining these scores produced an overall score of 42.1%.

In accordance with their employment agreements and consistent with industry practice, the target annual incentive for Messrs. Calamos and [executive vice president and co-chief investment officer Gary] Black was 600% and 300% of their base salary, respectively.

In determining the 2013 short-term incentive for Calamos, the committee considered the overall score of 42.1%, but also noted the decline in the company's operating income compared to 2012. As a result, the committee approved a 2013 short-term incentive of approximately 32% of his target incentive, more than 40% below his 2012 annual incentive.