First Data 2013 Annual Report Download - page 133

is achieved, this linkage is very strong. Additionally, FDC’s annual cash incentive plan for executives, the Senior Executive Incentive Plan (“SEIP”) is funded
each year based solely on company performance.
Emphasize Equity Ownership
The Committee requires that all executives have a significant equity stake in FDC to ensure complete alignment with shareholders, strong correlation
between company performance and executive compensation, and complete focus on the goals of FDC.
The 2007 Stock Incentive Plan for Key Employees of First Data Corporation and its Affiliates (the “2007 Equity Plan”) facilitates significant equity
ownership by executive officers. All executive officers have either directly purchased shares of stock or relinquished equity of their former employer in
connection with the Holding equity grants. The Committee believes that by requiring a personal investment in Holdings, the 2007 Equity Plan is a powerful
mechanism to facilitate equity ownership and closely align executive and shareholder interests. To ensure equity remains the predominant compensation
component for executives and to strengthen long-term alignment, executives also receive annual equity grants.
As a further demonstration of the Committee’s commitment to equity ownership as a path to align the interests of executives and employees with long-
term success of the Company, the Committee also approved a broad-based employee equity ownership program commencing in January 2014. The Committee
believes that creating a strong culture of ownership within FDC will benefit its clients, employees and shareholders.
Pay at a Competitive Market Position
The Committee ensures that incoming and incumbent executives are paid competitively. In order to successfully attract and retain top performing
executives, the Company annually reviews market data and aims to provide competitive total compensation opportunities. In light of recent hiring, the
Company and Committee have also gained significant insight into current compensation practices among peer companies and have leveraged this information
along with peer group analysis in making pay decisions.
The Company and the Committee periodically review the Company’s executive compensation practices against a peer group of companies. The
Company’s peer group is comprised of direct competitors, frequently identified peer companies to the Company’s direct competitors, and other companies
deemed comparable to the Company in terms of industry, pay practices, revenue and market value. The peer group includes the following 21 companies:
·Accenture ·ADP ·American Express
·Capital One Financial ·Computer Sciences Corp. ·Discover Financial
·eBay ·Fidelity Nat’l Info Services ·Fifth Third Bancorp
·Fiserv ·MasterCard ·PNC Financial Services
·SAIC ·SLM Corp. ·State Street Corp.
·SunTrust Banks ·Symantec Corp. ·Total System Services
·VISA ·Western Union ·Yahoo!
Competitive benchmarks for each of the Company’s executive officers are created by utilizing available information disclosed in proxy statements of
these companies in combination with generally available market compensation survey information. It is important to note that compensation data from non-
peer group companies is also given significant consideration since the Company also recruits talent from organizations outside the payments industry.
ELEMENTS OF COMPENSATION
Compensation for the Company’s executive officers is delivered through:
· base salary;
· annual cash incentives;
· equity;
· perquisites; and
· retirement plans.
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