ADT 2014 Annual Report Download - page 40

COMPENSATION OF EXECUTIVE OFFICERS—CONTINUED
The table below shows the metrics to be utilized and the weighting of those metrics in fiscal year 2015 for purposes of determining our
performance for the AIP:
Metric Weighting (Corporate Participants) Weighting (Business Unit Participants)
Corporate Recurring Revenue 33 1/3% 16 2/3%
Corporate Customer Retention 33 1/3% 16 2/3%
Corporate EBITDA 33 1/3% 16 2/3%
Business Unit Recurring Revenue 16 2/3%
Business Unit Customer Retention 16 2/3%
Business Unit-specific metrics 16 2/3%
For fiscal year 2015, the Compensation Committee approved the
following change to the design of the LTIP:
•Similar to the change made in the AIP, the SSFCF metric for
determining our PSU performance has been replaced with an
EBITDA metric. We believe that the EBITDA measure will provide a
more accurate indication of the overall performance of the
business and is better aligned with shareholder interests over the
long-term. As a result, 75% of the PSU awards granted in fiscal
year 2015 will be measured against our performance relative to
the EBITDA metric. The remaining 25% weighting for the PSUs will
remain Relative TSR.
Executive Benefits and Perquisites
Our Executive Officers, including the CEO and other NEOs, are
eligible to participate in the benefit plans that are available to
substantially all of our employees, including our defined contribution
savings plans, which includes the 401(k) Retirement Savings and
Investment Plan (“RSIP”), our medical, dental and life insurance plans
and long-term disability plans. Additionally, the Company provides
relocation benefits when a move is required. None of our NEOs
participate in a defined benefit pension plan.
Supplemental Savings and Retirement Plan
Executive Officers (US-based) are eligible to participate in the
Company’s Supplemental Savings and Retirement Plan (the “SSRP”),
a deferred compensation plan that permits the elective deferral of
base salary and annual performance-based bonus for executives in
certain career bands. The SSRP provides eligible employees the
opportunity to:
•contribute retirement savings in addition to amounts permitted
under the Company’s RSIP;
•defer compensation on a tax-deferred basis and receive tax-
deferred market-based growth; and
•receive any Company contributions that were reduced under the
RSIP due to Internal Revenue Service compensation limits.
Executive Physical Program
The Company strongly believes in investing in the health and well-
being of its executives as an important component in providing
continued effective leadership for the Company. As such, we
maintain an annual executive physical program, for which all of our
Executive Officers are eligible. The program allows for expenses for
an annual physical to be paid for by the Company, up to a total of
$3,000 per year.
Policies and Practices
The Company maintains certain policies and practices to ensure that
its compensation programs appropriately align the interests of its
executives with the interests of stockholders. We believe that these
policies and practices are aligned with best practices.
Change in Control and Severance Benefits
Our Executive Officers, including the CEO and other NEOs, may be
eligible for certain benefits under either The ADT Corporation
Severance Plan for U.S. Officers and Executives (the “Severance
Plan”) or The ADT Corporation Change in Control Severance Plan (the
“CIC Severance Plan”), depending upon the circumstances leading to
their termination of service of employment with the Company. In the
case of the CIC Severance Plan, a “double trigger” is required before
benefits become available to the executives covered by that plan. We
believe that the benefits available to the NEOs under this plan are
moderate in comparison to the broader market. Details with respect
to the key provisions of the severance plans currently in effect and the
payments and benefits that would be payable under the plans are set
forth in the section titled “Potential Payments Upon Termination or
Change in Control” below.
Stock Ownership and Retention Guidelines
The Compensation Committee believes that requiring executives to own and hold a significant amount of Company stock aligns the executives’
interests with those of our stockholders. The Compensation Committee has established the following ownership guidelines:
Level Ownership Guideline (as a multiple of base salary)
Chief Executive Officer 6x
Other Executive Officers 3x
32 The ADT Corporation 2015 Proxy Statement
PROXY STATEMENT