ADT 2015 Annual Report Download - page 40

COMPENSATION OF EXECUTIVE OFFICERS—CONTINUED
Elements of Executive Compensation
The Company’s total direct compensation program is comprised of three elements: base salary, annual incentive and equity-based long-term
incentives. A significant majority of Executive Officers’ total direct compensation is performance-based and at risk. The Company also provides
various benefit and retirement programs, as well as an annual executive physical for Executive Officers. The dashboard below provides an
overview of the elements of the Company’s executive compensation program, a brief description of each compensation element and the reason
for inclusion in the executive compensation program.
COMPENSATION DASHBOARD
Total Direct Compensation
Other Elements of Compensation
Annual Incentive
Approximately 21% of total direct compensation
for the CEO in FY2015
On average, approximately 27% of total direct
compensation for the other NEOs
To attract and retain top talent with the
experience, skills and abilities critical to the long-
term success of the Company
To reward sustained success in meeting or
exceeding key corporate or business objectives
through merit increases
To drive Company performance against key
financial goals which are aligned to the interests of
stockholders
To recognize individuals based upon their
performance against goals and objectives aligned
to the delivery of key operational and financial
priorities
Performance-based and not guaranteed
Long-Term Incentive (Equity-Based)
•
Approximately 64% of total direct
compensation for the CEO in FY2015
•
On average, approximately 48% of total direct
compensation for the other NEOs
Benefits Retirement Programs Perquisites
To directly align the interests of executives with
the interests of stockholders
To support focus on long-term, sustainable
Company performance, and to drive retention of
top talent
Generally performance-based and not guaranteed
To promote the health, wellness and well-being
of executives
Includes medical, dental and disability plans, as
well as severance plans and relocation
programs, as applicable
The NEOs generally are eligible to participate in
the same benefit plans applicable to the
Company's employee population as a whole
PSUs
Stock
Options
RSUs
To provide for basic retirement needs for our
executives
The NEOs generally are eligible to participate in
the same basic retirement plan available to
substantially all of the Company's non-union
employee population as a whole
Includes both retirement savings plan and
deferred compensation plan
The Company generally believes that providing
perquisites to our executives that are not provided
to the employee population as a whole is not
aligned to stockholder interests and best practice
The only exception is that certain executives,
including the NEOs, are eligible to receive an
annual physical examination at the Company's
expense
Additional detail can be found on pa
g
e 36
Base Salary
Approximately 15% of total direct compensation
for the CEO in FY2015
On average, approximately 25% of total direct
compensation for the other NEOs
Base Salary
Base salaries for Executive Officers, including the NEOs, are reviewed
annually by the Compensation Committee. Factors considered in the
Compensation Committee’s determination of base salary for an
individual Executive Officer include the scope, complexity and
criticality of the role, internal pay equity assessments, the individual
executive’s performance and the market data for similar roles at
companies in our Peer Group (see page 35 for details on how the
peer group is developed and utilized).
The effective date for merit increases for the Company’s Executive
Officers historically coincides with the beginning of the fiscal year.
Based upon its assessment of overall Company performance in fiscal
year 2014, the Compensation Committee elected not to provide merit
increases for any of the Executive Officers, including the NEOs, for
fiscal year 2015. During fiscal year 2015, however, the
Compensation Committee approved a 12.9% increase in
Mr. Bleisch’s base salary, effective August 1, 2015. This increase
was driven by the Compensation Committee’s determination that
Mr. Bleisch’s compensation was not competitive based on alignment
to market.
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