ADT 2015 Annual Report Download - page 46

COMPENSATION OF EXECUTIVE OFFICERS—CONTINUED
How Peer Group Companies are Selected How Peer Group Data is Utilized
•Similar or related industry sector
•Generally focused on generating subscription-based recurring
revenue, with operations and revenues primarily in the United
States and Canada
•Primarily business-to-consumer (B2C) focused, although
companies that are business-to-business (B2B) focused also
considered
•Generally between $1 and $10 billion in revenue, with
compensation data size-adjusted for the Company’s revenue
•As an input in determining base salaries, annual incentive
targets and long-term incentive award targets (CEO and CFO)
•As an input in the design of compensation plans
•To validate whether our Executive Compensation program is
aligned with Company performance
•To benchmark the form and mix of equity awards granted to
our employees
•To benchmark share ownership guidelines
The Compensation Committee reviews the peer group periodically to determine whether any significant changes to the business condition of the
Company or any of its peers would warrant any changes to the peer group. No changes were made to the peer group for fiscal year 2015. The
peer group utilized for fiscal year 2015 was:
Allegion plc EarthLink Holdings Corporation Stanley Black & Decker, Inc.
Cablevision Systems Corporation Frontier Communications Corporation Telephone & Data Systems, Inc.
CenturyLink, Inc. Netflix, Inc. The Brink’s Co.
Charter Communications, Inc. Rollins, Inc. Tyco International Ltd.
Cincinnati Bell SIRIUS XM Radio, Inc. Windstream Corporation
In addition to the peer group noted above, the Compensation Committee also considers design and practice information from a number of
“reference peers,” including: DIRECTV, T-Mobile US, Ascent Capital Group, Diebold Inc., US Cellular Corporation and ServiceMaster. While
these companies meet the subscription-based recurring revenue and primary B2C screening criteria, most of the reference peer companies
have annual revenues outside the range used in the screening process.
Executive Benefits and Perquisites
The Company’s Executive Officers, including the NEOs, are eligible to
participate in the benefit plans that are available to substantially all of the
Company’s employees, including its defined contribution savings plans,
medical, dental and life insurance plans and long-term disability plans.
Additionally, the Company provides relocation benefits when a move is
required. None of the 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 Retirement Savings and Investment Plan (“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, the
Company maintains an annual executive physical program, for which
all of the 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.
Other Compensation 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 its stockholders. We believe that
these policies and practices are aligned with executive compensation
best practices.
Stock Ownership Guidelines and Share Retention Policy
The Compensation Committee believes that requiring executives to own and hold a significant amount of Company stock aligns the executives’
interests with those of its stockholders. The Compensation Committee has established the following stock ownership guidelines:
Level Ownership Guideline (as a multiple of base salary)
Chief Executive Officer 6x
Other Executive Officers 3x
36 The ADT Corporation 2016 Proxy Statement
PROXY STATEMENT