ADT 2011 Annual Report Download - page 36

PROPOSAL NUMBER SIX—ADVISORY (CONSULTATIVE) VOTE ON
EXECUTIVE COMPENSATION
Proposal 6—Non-Binding Advisory (Consultative) Vote on Executive Compensation
The Board recognizes that providing stockholders with an advisory vote on executive compensation
can produce useful information on investor sentiment with regard to the Company’s executive
compensation programs. As a result, this proposal provides shareholders with the opportunity to cast an
advisory (consultative) vote on the compensation of our named executive officers, as described in the
section of this Proxy Statement entitled ‘‘Executive Compensation Report,’’ and endorse or not endorse
our fiscal 2011 executive compensation philosophy, programs and policies and the compensation paid to
the named executive officers.
As discussed in the Executive Compensation Report section of this Proxy Statement, our
compensation principles and underlying programs are designed to attract, motivate and retain key
executives who are crucial to our long-term success. The compensation paid to our named executive
officers reflects our commitment to pay for performance. For our CEO, well over 85% of targeted
direct pay continues to be in the form of at-risk performance-based compensation—consisting of
long-term equity awards and the annual performance bonus. Moreover, as a result of this structure, our
CEO’s compensation has been correlated to Company performance in fiscal 2011 and over longer
periods. In addition, we recognize that a strong governance framework is essential to an effective
executive compensation program. The framework and executive compensation philosophy, which are
described in more detail in the Executive Compensation Report, are established by an independent
Compensation Committee that is advised by an independent consultant.
The advisory (consultative) vote on the Executive Officer Compensation Report is non-binding,
meaning that our Board will not be obligated to take any compensation actions, or to adjust our
executive compensation programs or policies, as a result of the vote. Notwithstanding the advisory
nature of the vote, the resolution will be considered passed with the affirmative vote of a relative
majority of the votes cast by the holders of common shares represented at the Annual General Meeting
in person or by proxy, whereby abstentions, broker non-votes, blank and invalid votes are disregarded
in establishing the number of votes cast.
Although the vote is non-binding, our Board and the Compensation Committee will review the
voting results. To the extent there is a significant negative vote, we would communicate directly with
shareholders to better understand the concerns that influenced the vote. The Board and the
Compensation Committee would consider constructive feedback obtained through this process in
making future decisions about executive compensation programs.
The Board unanimously recommends that shareholders support this proposal and vote FOR the
following resolution:
‘‘RESOLVED, that shareholders approve, on an advisory basis, the compensation of the
Company’s named executive officers, as disclosed in the Executive Compensation Report of this Proxy
Statement.’’
22 2012 Proxy Statement