First Data 2013 Annual Report Download - page 132

ROLE OF THE COMMITTEE
The Committee reviews and approves all aspects of the Company’s compensation programs for its executive officers. Specifically, under its charter, the
Committee is tasked with:
· establishing the Company’s compensation philosophy;
· evaluating performance and setting compensation for the Company’s executive officers;
· overseeing regulatory compliance with respect to compensation matters; and
· delegating to and monitoring various subcommittees with responsibility for administrative and legal compliance for retirement and benefit plans.
During 2013, the Committee was comprised of Scott C. Nuttall (Chairperson), Joe W. Forehand and Henry R. Kravis. All of the foregoing individuals
are affiliated with KKR and, therefore, not deemed independent Directors. Disclosure of payments between the Company and KKR affiliates is included in
Item 13 “Certain Relationships and Related Transactions, and Director Independence” of this Form 10-K.
The equity compensation provided to the senior executives of the Company is approved by the Governance, Compensation and Nominations Committee
(the “Holdings Committee”) of First Data Holdings Inc. (“Holdings”), the parent corporation of FDC (the “FDC Committee” and the “Holdings Committee”
together referred to as the “Committees”). The FDC Committee is comprised of the same individuals as are members of the Holdings Committee.
ROLE OF MANAGEMENT
The Company’s management provides information, data, analysis, updates and recommendations to the Committee. Specifically, management provides
recommendations on pay levels for executive officers other than the Chief Executive Officer (“CEO”) as well as the design of all material compensation and
benefit plans. Finally, management is responsible for the administration of the Company’s executive compensation programs and policies.
EXECUTIVE COMPENSATION PROGRAM OBJECTIVES
Executive Compensation Philosophy
The Company’s executive compensation philosophy and corresponding pay practices are designed to align executives tightly with the Company’s
growth objectives, resulting in increased value for shareholders. This alignment is created via equity compensation and annual incentive compensation, the
value of which is driven by company performance over the long and short term, respectively. All executives, including those hired in 2013 maintain a
significant equity stake in the Company.
When considering the design of the Company’s compensation plans, incentive plan funding schemes, and individual compensation decisions, the
Committee considers several principles.
· Focus on total compensation, rather than individual pay components.
· Align realized compensation with company performance.
· Emphasize equity ownership as largest driver of compensation value.
· Pay at a competitive market position in order to attract the best available talent.
Focus on Total Compensation
FDC has a strong commitment to rewarding all executives, and all employees, on a total compensation basis. Rather than focus on individual pay
components, FDC emphasizes total compensation opportunities. For executives, FDC and the Committee believe that a large majority of these total
compensation opportunities are delivered via long-term equity. This philosophy is reflected in the hiring packages for new executives and other 2013
compensation decisions described below.
Align Realized Compensation with Company Performance
The Committee places a great emphasis on the alignment of compensation with company performance and shareholder value. Executives should see
realized compensation rise or fall based on the performance of the Company. With a significant portion of compensation opportunities derived from equity,
and further because FDC equity is not liquid until an Initial Public Offering (“IPO”)
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