The objective of the executive compensation plans is to attract, retain and motivate high-performing executives to create sustainable long-term value for stockholders.
To achieve this objective, the company and the Compensation Committee use the following guiding principles when evaluating executive compensation policies and decisions:
Alignment with the company’s business strategy:
Alignment to stockholders’ interests:
- Compensation is linked with the achievement of specific short- and long-term strategic business objectives and the company’s overall performance
- Compensation plans are linked to key business drivers that support long-term stockholder value creation.
- Interests of executives are aligned with those of long-term stockholders through policy and plan design
- Stock ownership guidelines are used to align the interests of executives with those of stockholders over the long term
- As an executive increases in seniority, an increasing percentage of total compensation is subject to vesting through the greater use of equity-based awards to aid in retention and to focus executives on sustainable long-term performance
Pay for performance:
- Compensation plan design should not create an incentive for excessive risk-taking, and each plan is reviewed periodically to determine that it is operating as intended
- Clear relationships should exist between executive compensation and performance. Compensation should reward both corporate and individual performance
- Total compensation includes a meaningful variable component that is linked to key business objectives and the company’s overall performance
- A substantial portion of variable compensation is awarded in the form of equity-based awards
- Equity awards are generally granted based on the achievement of annual performance goals and are subject to time-based vesting
- Incentive compensation is subject to risk of forfeiture in accordance with the clawback policy
- The Compensation Committee has the ability to exercise negative discretion to reduce compensation as appropriate
More information about executive compensation can be reviewed in our 2015 Proxy Statement.