Employee Pay and Benefits

One important way we embody our values is by serving and supporting our employees through programs that allow them to flourish and do their best. We offer a variety of benefits and perks that show our respect for our employees and their families. Highlighted below are several benefits that are remarkable in our industry. For a complete overview of the employee benefits program, visit REI.com/jobs.

PATH PLAN HEALTH CARE COVERAGE

We believe it's important to offer all employees health care benefits they can afford. Part-time employees who work fewer than 20 hours per week (and who aren't eligible for our Flex Plan benefits) can enroll in health care coverage through our PaTH program.

• REI pays 100 percent of life insurance coverage and 60 percent of the premium cost for employee-only medical coverage through PaTH. Optional dental coverage is also available.
• PaTH is exceptional in the retail industry. Most retailers do not subsidize coverage for their part-time employees. And, our employees clearly appreciate this benefit — more than 25 percent of eligible employees participate in PaTH medical coverage; the industry average for this type of plan is 10 percent.
• As more employees retain eligibility for our full time Flex benefits, enrollment in PaTH declined, but 952 employees were enrolled in the PaTH Plan at the end of 2010.

Flex Plan Health Care Coverage

Full-time and eligible part-time employees (working more than 20 hours per week) get a variety of medical options through our Flex Plan. In 2010, we also made sure our health care benefits met requirements put in place through the Patient Protection and Affordable Care Act.

• Each Flex Plan option covers core services (like preventive care) for employees at no cost to them. We also cover up to 85 percent of the premium for employee-only medical and dental coverage, which is considerably higher than what most retailers offer.
• Over 5,000 employees were enrolled in the Flex Plan at the close of 2010.

Tools for Wellness

Good health and well-being are attributes everyone hopes to enjoy throughout their lifetime, but we know good health doesn't just happen. In 2010, we continued REI Health Quest, a points-based wellness incentive program that helps employees focus on personal health management. All employees, regardless of status, can participate in this program.

• The cornerstone of the Health Quest program is self awareness via an online well-being assessment. Employees who take this 15-minute questionnaire receive a snapshot of their current well-being, health status and risks, as well as health tips and areas to focus on or improve.
• To encourage employees to take the self-assessment, we offer Flex Plan-eligible employees $250 in Healthy Lifestyle Dollars during open enrollment that they can apply toward their benefit costs. When employees complete health and stewardship activities throughout the year, they rack up points. Once they reach a milestone level, they're rewarded with a drawing for prizes, discounts and more.

Managing Absence

In 2010, REI implemented initial phases of a comprehensive health and absence management strategy, including:

• Enhanced short-term disability and salary continuation benefit for all staff
• Consolidated leave and disability management with our existing vendor and integrated with national workers' compensation administrator
• Introduced a centralized health resource, REI Health Guide, for intake and reporting of all leaves of absence as well as coordination with other health management resources
• Standardized the process for return-to-work for employees with an injury or disability

Because of this strategy, the co-op saw a 2 percent increase in health benefit expense for 2010 (per employee per year), the lowest incremental increase in several years.

Saving for Retirement

Eligible employees share in the co-op's financial success through our industry-leading REI Retirement and Profit Sharing Plan.

• In early 2011, REI funded over $26.4 million in contributions for the year closing in 2010.
• Over 5,000 employees received a guaranteed 5 percent company retirement contribution plus the full discretionary 10 percent in a profit-sharing contribution from REI, for a total of 15 percent. This amount far exceeds the retail industry norm of three percent.

All employees may contribute their own pay to REI's Retirement and Profit Sharing Plan as well as take advantage of retirement planning and investment advice from our retirement plan administrator.

Incentives for Performance

Employees receive Xcels Annual Incentive Plan awards based on how well the co-op performs overall and how each division or store performs. Individual employee performance also factors into how much employees receive each year.

As a result of outstanding performance in 2010, 100 percent of eligible employees received a payout under the Xcels Plan. The total employee payout was $33 million.

LOOKING AHEAD

Our focus on providing employees comprehensive benefits hasn't wavered, even in a lagging economy. We continually look for ways to improve our benefit package to make sure it's relevant to employee needs.