ADT 2007 Annual Report Download - page 54

effects of the sale of accounts receivable programs, cash paid for purchase accounting and
holdback liabilities and voluntary pension contributions. For fiscal year 2007, the approved
categories of adjustments at the corporate level included elimination of the effects of (i) business
disposals, (ii) charges for the early extinguishment of debt, (iii) charges and income related to
former management or shareholder litigation, (iv) certain income tax adjustments, (v) goodwill or
other intangible asset impairments, (vi) new accounting pronouncements and the cumulative effect
of change in accounting policy, (vii) restructuring and asset impairment charges and
(viii) Separation-related expenses. Similar adjustments were authorized for the performance
measures governing Mr. Gursahaney’s bonus at the operating unit levels.
The table below shows the 2007 target, maximum and actual bonus payments that each of our
named executive officers received under the annual incentive plan for fiscal year 2007. These amounts
are reported in the ‘‘Non-Equity Incentive Plan Compensation’’ column of the Summary Compensation
Table.
Fiscal Year 2007 Performance Bonus Summary
Named Executive Officer (Current) Maximum(1) Target Actual
Edward Breen ..................................... $3,656,250 $1,625,000 $3,250,000
Christopher Coughlin ............................... $1,800,000 $ 800,000 $1,605,000
John Evard ....................................... $ 742,770 $ 330,120 $ 660,000
Carol Anthony Davidson ............................. $ 725,625 $ 322,500 $ 645,000
Naren Gursahaney .................................. $1,260,000 $ 560,000 $ 880,000
(1) In November 2006, the Board approved maximum bonus payouts of 0.25% of net income before
special items for Mr. Breen, subject to a cap of $5.0 million imposed by the 2004 SIP, and 0.12%
for the other Senior Officers, subject to the same cap. At the same time, the Compensation
Committee established a maximum payout of 200% of target, plus or minus 25% based on
individual qualitative performance measures for purposes of the annual incentive plan.
The Board approved performance bonus payouts for each of our current named executive officers
in November 2007. The Board approved performance bonuses at 200% of target for each named
executive officer other than Mr. Gursahaney, who received a bonus of 157% of target, based on (i) the
achievement of the quantitative performance measures above the target levels in accordance with the
pre-established formulas and (ii) the achievement of qualitative performance measures described below:
• Mr. Breen’s qualitative goals were set forth in Chief Executive Officer performance scorecards
that the Board regularly reviews. Those goals included the successful completion of the
Separation, plus objectives related to growth, operational excellence, management of our
business portfolio, market position, talent and process upgrades, and promotion of our core
values across the Company.
• Performance bonuses for Messrs. Coughlin, Davidson and Evard reflected their significant
positive contributions to managing our businesses and to successfully completing the Separation.
• Mr. Gursahaney’s performance bonus reflected the financial performance of the businesses he
managed during fiscal year 2007 and his significant positive contributions to, and leadership in,
our restructuring effort.
Retention Bonuses in Connection with Separation
In January 2006, the Board, upon the recommendation of the Compensation Committee, approved
a retention plan for employees in key functional positions who were deemed to be a retention risk and
essential to the Separation. The retention plan provided for cash payments of up to 200% of base
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