Chrysler 2015 Annual Report Download - page 122

122 2015 | ANNUAL REPORT
Remuneration of Directors
Fixed Component
Base salary is the only fixed component of our Executive Directors’ total cash compensation and is intended to provide
market-competitive pay to attract and retain well qualified senior executives and expert leaders. Base salary is based
on the individual’s skills, scope of job responsibilities, experience, individual performance and competitive market data.
The base salaries of our Executive Directors are evaluated together with other components of compensation to ensure
that they are in line with our overall compensation philosophy and are aligned with performance.
With FCA’s formation in October 2014, a new annual base salary of U.S.$4.0 million for our CEO and a new annual
base salary of U.S.$2.0 million for our Chairman were approved. This decision was reached using the compensation
program benchmarking and peer group review process described above. The Company believes that paying our
Executive Directors at or above these benchmarks is appropriate to retain them throughout the business cycle.
2015 Base Salary
The Company does not guarantee annual base salary increases and the base salary did not change in 2015 for either
of the Executive Directors.
Variable Components
The CEO is eligible to receive short-term variable compensation, subject to the achievement of pre-established,
challenging economic and financial performance targets. The variable components of the CEO’s remuneration, both
short and long-term, are linked to predetermined, measurable objectives which serve to motivate strong performance
and shareholder returns and are approved by the Company’s Non-Executive Directors. The Non-Executive Directors
believe that placing significantly more weight on the long-term component is appropriate for the CEO position because
it focuses efforts on the Company’s long-term objectives in addition to being retentive.
Analysis of different scenarios are carried out on an annual basis to examine the relationship between the performance
criteria chosen and the possible outcomes of the variable remuneration of the Executive Directors. The analysis
conducted for 2015 demonstrated that the Company continued to maintain a strong link between financial and
operational performance and remuneration, that the performance criteria selected for both the short-term and long
term incentive components of total remuneration are appropriate, and that the performance criteria also support the
Company’s near and long term strategic objectives.
OUR COMPENSATION PHILOSOPHY IS DESIGNED TO REWARD PERFORMANCE AND LEADERSHIP
The bonus elements and calculations for the CEO follow the same philosophy as the company-wide Performance and
Leadership Bonus Plan for all eligible FCA employees.