ADT 2014 Annual Report Download - page 31

COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION OF EXECUTIVE OFFICERS
Compensation Discussion and Analysis
This section of the Proxy Statement describes in detail the Company’s compensation philosophy and its compensation programs, and reviews
compensation decisions for fiscal year 2014 for our Named Executive Officers (the “NEOs”). Our NEOs for fiscal year 2014 are listed below.
Name Title
Naren Gursahaney President and Chief Executive Officer (“CEO”)
Michael Geltzeiler Senior Vice President and Chief Financial Officer (“CFO”)
Alan Ferber President, Residential Business
N. David Bleisch Senior Vice President, Chief Legal Officer and Corporate Secretary
Jerri DeVard Senior Vice President and Chief Marketing Officer
The Compensation Discussion and Analysis also describes
compensation programs that apply to executives, other than the
NEOs, that report directly to the CEO (collectively, with the NEOs, the
“Executive Officers” of the Company).
Executive Summary
The Company is a leading provider of monitored security, interactive
home and business automation and related monitoring services in the
United States and Canada, serving approximately 6.7 million
residential, small business and commercial customers. ADT has one
of the most trusted and well-known brands in the monitored security
industry today. We deliver an integrated customer experience by
maintaining the industry’s largest sales, installation and service field
force as well as a robust monitoring network, all backed by
approximately 17,500 employees. Our broad and pioneering set of
products and services, including ADT Pulse ®interactive home and
business solutions and home health services, meet a range of
customer needs for today’s active and increasingly mobile lifestyles.
We believe we are well positioned to continue to lead the large and
growing residential and expanded business security market, and that
our demonstrated expertise and established footprint will help us to
become a leader in the evolving market for home health monitoring,
lifestyle and business productivity solutions.
Fiscal Year 2014 Business Highlights
Following the first fiscal quarter of 2014, the Company delivered solid
sequential improvements in our operational performance, resulting in
strong financial results for fiscal year 2014, and made significant
progress on a number of strategic initiatives – positioning the
Company to drive further improvements in the coming year. Highlights
of ADT’s significant achievements for fiscal year 2014 include:
•Grew recurring revenue by 4% to $3.2 billion;
•Earned net income of $304 million compared with $421 million for
fiscal year 2013;
•Increased EBITDA before special items* by 5% to $1.8 billion
while improving EBITDA margins* by 70 basis points;
•Reduced revenue-based attrition from 13.9% to 13.5%;
•Added approximately 370,000 high quality residential and
commercial customers (excluding approximately 30,000
wholesale contract monitoring accounts) via the acquisition of
Reliance Protectron, Inc., nearly doubling our presence in Canada
and positioning us for greater growth opportunities;
•Surpassed 1 million Pulse customers; Pulse now accounts for
16% of our existing customer base and for approximately 70% of
new direct residential customer accounts; and
•Repurchased 35 million of our outstanding shares and returned
$132 million to our stockholders in the form of dividends.
We made several key executive hires during fiscal year 2014 in order
to better position the Company for future success, among them
Michael Geltzeiler, our CFO, and Jerri DeVard, our Chief Marketing
Officer (“CMO”), both of whom are NEOs. We also hired Laura Miller
as our new Chief Human Resources Officer (“CHRO”) during fiscal
year 2014 and Andrea Martin as President for our Canadian
operations during the first part of fiscal year 2015. We believe that all
of these key hires have significantly strengthened our executive
leadership team.
* For a definition of these non-GAAP financial measures and a reconciliation to GAAP
measures, see “Reconciliation of Non-GAAP Measures to GAAP Measures and Selected
Definitions” on page 49 of this Proxy Statement.
Overview of Compensation Programs
The Company’s compensation programs are designed with the
primary purpose of promoting long-term value creation for
stockholders. Our compensation programs accomplish this objective
by:
•promoting a pay-for-performance culture by linking total
compensation to defined annual and long-term performance goals
which are aligned with the interests of stockholders;
•attracting and retaining the executive talent necessary to execute
the Company’s business strategy and deliver sustained
performance through market-competitive total compensation
opportunities; and
•motivating appropriate risk taking without encouraging or
rewarding excessive risk.
The ADT Corporation 2015 Proxy Statement 23
PROXY STATEMENT