In the spirit of our cooperative structure, we share our financial success with our members, employees and communities.

As a co-op, we strive to return up to 10 percent of our members' eligible purchases through an annual dividend. We have provided a dividend to our members every year since our founding in 1938.

In 2007 we will give $58 million back to our 3.1 million active co-op members — a 16 percent increase from 2006 when we retuned more than $50 million in the form of a member dividend.

We celebrate our achievements with our employees through incentive pay and an industry leading retirement and profit sharing plan.

Profit Sharing and Retirement Plan

REI offers an exceptional retirement plan to employees who have worked for REI for 12 consecutive months and at least 1,000 hours. We guarantee a contribution of five percent of employees' eligible annual earnings, and up to an additional 10 percent, as company profit allows. We know of no other retail company that offers as generous a retirement benefit.

Based on 2006 performance, we funded the maximum contribution to our employees at 15 percent. We provided $17 million to 3,605 eligible employees - more than a 21 percent increase from 2005 payouts. Last year, we shared $14 million in profit with 3,000 employees.

Incentive Pay Program

REI employee pay is market-competitive and performance-based. In addition to base pay, all employees are eligible for the company's incentive pay program, a rarity in the retail industry. Our incentive payout is based on the performance of REI overall, the employee's store/division results and his or her personal job performance. REI's non-retail staff receives incentive pay each February, while our store employees receive pay outs twice annually.

Based on 2006 results, REI funded more than $18 million through the company's incentive pay program to eligible employees.