First Data 2007 Annual Report Download - page 154

EXECUTIVE COMPENSATION PHILOSOPHY
First Data's executive compensation philosophy and corresponding pay practices are designed to create a strong incentive for First Data executives to achieve
the Company's financial and strategic objectives, resulting in increased value for shareholders.
Alignment of executives with shareholders is created via a primary emphasis on equity compensation, followed by a secondary emphasis on annual incentive
compensation. Non-performance based elements of compensation, such as executive benefits and perquisites, which do not create any additional performance
incentive or shareholder alignment, are not emphasized within the Company's executive compensation philosophy or practices.
First Data aligns itself aggressively in the marketplace on a total compensation basis to be able to attract and retain senior leaders. In order to achieve the
desired market positioning in a manner consistent with the Company's compensation philosophy, First Data aims to provide executive officers with base pay
opportunities at median levels, short-term cash incentive opportunities at approximately the 75th percentile and in the past have targeted equity incentive
opportunities at or above the 75th percentile. As a result of becoming privately owned, the Company's equity programs have changed and these changes are
discussed in the Equity portion of the Elements of Compensation section.
EXECUTIVE COMPENSATION PROGRAM OBJECTIVES
First Data's executive compensation objectives listed below have not changed from 2006 to 2007 or as a result of the merger:
• aligning compensation to increased shareholder value;
• facilitating equity ownership;
• paying for performance;
• driving behaviors consistent with First Data's core values; and
• paying at a competitive market position.
Following the merger, all of First Data's compensation objectives have been retained as important goals of a successful compensation strategy. However, as a
company with concentrated non-public ownership, the Committee now places an even greater emphasis on alignment of compensation with increased
shareholder value and facilitating equity ownership.
Aligning Compensation to Increased Shareholder Value
First Data aligns executive compensation with increased shareholder value by promoting and creating opportunities for significant equity ownership. By
providing equity compensation which vests over time, a long-term focus on successful business results is promoted.
Facilitating Equity Ownership
Prior to the merger, each executive officer was encouraged to have ownership of First Data common stock to align their financial interests with the interests of
shareholders. Following the merger, no ownership guidelines exist for executive officers.
In order to promote and facilitate significant equity ownership by executive officers following the merger, the 2007 Stock Incentive Plan for Key Employees
of First Data Corporation (the "2007 Equity Plan") was adopted by the Committee. The 2007 Equity Plan allows for executive officers to purchase shares of
restricted stock and receive matching grants of stock options in First Data Holdings Inc. The Committee believes that by requiring a personal investment in
the company, the 2007 Equity Plan will go even further than the previous ownership guidelines toward both facilitating ownership and aligning executive and
shareholder interests.
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