Chrysler 2015 Annual Report Download - page 123

2015 | ANNUAL REPORT 123
Short-Term Incentives
The primary objective of short-term variable incentives is to focus on the business priorities for the current year. The
CEO’s variable incentive is based on achieving short-term (annual) financial and other designated objectives proposed
by the Compensation Committee and approved by the Non-Executive Directors each year.
Our Methodology for Determining Annual Bonus Awards
With regard to the determination of the CEO’s annual performance bonus, the Compensation Committee:
approves the objectives and maximum allowable bonus;
selects the choice and weighting of objectives;
sets the stretch objectives;
reviews any unusual items that occurred in the performance year to determine the appropriate overall measurement
of achievement of the objectives; and
approves the final bonus determination.
For 2015, the Compensation Committee decided to replace the first metric, Trading Profit, with Adjusted EBIT to
align the corporate metrics used in the performance bonus, with the Company’s published guidance. The other two
metrics, Adjusted net profit and Net industrial debt, remain unchanged as objectives for the CEO’s bonus plan. The
three metrics were equally weighted at one-third each and the goals were set with challenging hurdles. Each objective
pays out independently. There is no minimum bonus payout; if none of the threshold objectives are satisfied, there is
no payment.
Base Salary Target Bonus %
Company
Performance
Factor
BONUS
EARNED
Reflects market
Adjusts
opportunity based
on business results
x x =