ADT 2008 Annual Report Download - page 54

to incentivize them to outperform the companies in the S&P Industrials Index between July 2, 2007
and June 30, 2010, and to help Tyco retain its key talent.
The only other LTI compensation granted to named executive officers in fiscal 2008 were grants
made to Messrs. Gursahaney and Oliver. These awards are discussed above under ‘‘Tally Sheets and
Composite Pay Mix Analysis.’’
Fiscal 2009 Annual Equity Award
During fiscal 2008, the Compensation Committee decided to modify the structure of the LTI
compensation program for fiscal 2009 to better align it with the returns our investors realize from their
Tyco common shares. As a result, time-based RSUs were eliminated from the annual equity program
for Senior Officers. Instead, our named executive officers and other key leaders received one-half of
the grant-date value in stock options that vest ratably over four years, and one-half of the value in
performance shares. The ultimate value of the performance shares will depend on Tyco’s total
shareholder return compared to the total shareholder returns of companies in the S&P Industrials
Index over a three-year period. This change better aligns the largest component of our executive
compensation with investor returns and reinforces our commitment to pay for long-term performance.
Executive Benefit Plans and Other Elements of Compensation
All of our named executive officers are eligible to participate in the benefit plans that are available
to substantially all of our other U.S. employees. These benefit programs include Tyco’s tax-qualified
401(k) Retirement Savings and Investment Plans (‘‘RSIPs’’) and its medical insurance, dental insurance,
life insurance, long-term disability and long-term care plans. The retirement programs at Tyco do not
include active defined benefit plans for our named executive officers or for other U.S. executives,
except that Mr. Breen is entitled to pension benefits under his employment agreement. Besides the
plans that are available to substantially all of its U.S. employees, Tyco offers additional limited
perquisites and other benefits to its named executive officers. These perquisites and benefits are
competitive with those provided to similarly situated executives and consistent with our overall
compensation philosophy. They are designed to ensure that we can effectively retain our named
executive officers and compete for new talent while constraining costs and administrative burdens.
These additional benefits primarily consist of:
• Tyco’s Supplemental Savings and Retirement Plan (the ‘‘SSRP’’);
• supplemental insurance benefits (executive life, disability and long-term care);
• a cash perquisite allowance program; and
• use of the corporate aircraft.
Tyco Supplemental Savings and Retirement Plan
This plan permits the deferral of base salary and performance-based bonus. All executives earning
more than $105,000 per year are eligible to participate in the SSRP. The SSRP provides our executives
with the opportunity to:
• contribute retirement savings in addition to amounts permitted under the RSIPs;
• defer compensation on a tax-deferred basis and receive tax-deferred earnings growth; and
• receive any Company contributions that were reduced under the RSIPs due to IRS
compensation limits.
2009 Proxy Statement 37