Hertz 2014 Annual Report Download - page 249
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Table of Contents
In addition, Hertz Holdings adopted new forms of equity award agreements in 2015 with enhanced clawback provisions. Hertz Holdings’ clawback
policy and any related plans or award agreements will be further revised, to the extent necessary, to comply with any rules promulgated by the
SEC pursuant to Section 954 of the Dodd‑Frank Wall Street Reform and Consumer Protection Act.
Hertz Holdings has stock ownership guidelines for our senior executives and non‑employee directors. The guidelines establish the following target
ownership levels:
Equity equal to five times base salary for our CEO;
Equity equal to three times base salary for our CFO and business unit heads;
Equity equal to one times base salary for our other senior executives; and
Equity equal to three times annual cash retainer for non‑employee directors.
Senior executives and non‑employee directors have five years to reach the target ownership levels. Senior executives subject to the guidelines are
permitted to count towards the target ownership levels shares owned outright or in trust, shares owned through Hertz Holdings’ Employee Stock
Purchase Plan, the approximate after‑tax value of unvested restricted stock units (, 50% of unvested restricted stock units) and the
approximate after‑tax value of PSUs if the performance criteria has been met, even if the service requirement has not been met (, 50% of
PSUs if performance criteria is met). Non‑employee directors subject to the guidelines are permitted to count towards the target ownership levels
shares owned outright or in trust and the approximate after‑tax value of phantom shares (, 50% of phantom shares).
In February of 2013, Hertz Holdings’ modified its policy regarding trading in Hertz Holdings’ securities to prohibit employees and directors from
entering into any type of arrangement, contract or transaction which has the effect of pledging shares or hedging the value of Hertz Holdings’
common stock.
Section 162(m) of the Code operates to disallow public companies from taking a federal tax deduction for compensation in excess of $1 million
paid to certain of its executive officers, excluding performance‑based compensation that meets requirements mandated by the statute. As part of
its role, our Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Code. Hertz
Holdings’ stockholders approved the 2008 Omnibus Plan so that awards granted under the plan may qualify as performance‑based compensation.
In addition, EICP payments for 2014 were generally paid to executive officers under the Senior Executive Bonus Plan, which was approved by
Hertz Holdings’ stockholders at its 2010 annual meeting and is designed to qualify as tax‑deductible under Section 162(m) of the Code. When
appropriate, our Compensation Committee intends to preserve deductibility under Section 162(m) of the Code of compensation paid to our NEOs.
However, changes in tax laws (and interpretations of those laws), as well as other factors beyond our control, may affect the deductibility of
executive compensation. Further, in certain situations, our Compensation Committee may approve compensation that will not meet these
requirements in order to ensure the total compensation for our NEOs is consistent with the policies described above.
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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