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Components of Compensation

Our primary focus in compensating executives is on the longer-term and performance-based elements of compensation. The table below shows our pay components, along with the role and factors for determining each pay component. The percentages are based on the average percentage among the NEOs including the CEO.

Pay Component Role Determination Factors

Base Salary

  • Provides a fixed portion of annual cash income
  • Value of role in competitive marketplace
  • Value of role to the Company
  • Skills and performance of individual compared to the market as well as others in the Company

Annual Incentive

(i.e., Pay-for-Results (“PfR”))

Payments to executives for annual PfR incentive purposes are made under the Stock Incentive Plan (the “Plan”)

  • Provides a variable and performance-based portion of annual cash income
  • Focuses executives on annual objectives that support the long-term strategy and creation of value
  • Target awards based on competitive marketplace, level of position, skills and performance of executive
  • Actual awards based on achievement against annual corporate, business unit, and individual goals as set and approved by the HRC

Long-term Incentives

  • Restricted Stock Units (“RSUs”)
  • Performance-Adjusted Restricted Stock Units (“PARSUs”)
  • Supports need for long-term sustained performance
  • Aligns interests of executives and stockholders, reflecting the time-horizon and risk to investors
  • Encourages equity ownership and stockholder alignment
  • Retains key employees
  • Target awards based on competitive marketplace, level of position, skills and performance of the executive
  • Actual values based on performance against corporate goals and total stockholder return (“TSR”) performance

All others:

  • Benefits
  • Perquisites
  • Severance protection
  • Supports the health and security of our executives and their ability to save on a tax-deferred basis
  • Enhances executive productivity
  • Competitive market practices for similar roles
  • Level of executive
  • Standards of best-in-class governance