Hertz 2014 Annual Report Download - page 273

Table of Contents
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 
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In 2014, our Compensation Committee conducted its annual review of the risk profile of the Company’s compensation policies and practices. In
connection with this review, the Compensation Committee engaged its independent consultant at the time, Semler Brossy Consulting Group, LLC
(“Semler Brossy”), to assist it in analyzing the Company’s compensation policies and practices and associated compensation risks. Semler
Brossy, with the assistance of management, prepared a risk profile assessment of the Company’s executive compensation policies and practices
for executive officers. After its review of these assessments, the Compensation Committee presented the results to the Board in connection with
the Board’s annual enterprise risk assessment. In addition, the Company’s management reviewed its compensation plans and practices in 2014
for all employees and presented the findings to the Compensation Committee. Based in part on such reports, the Compensation Committee
determined that, for all employees, the Company’s enterprise‑wide compensation policies and practices, in conjunction with the Company’s
existing processes and controls, do not incentivize employees to take unnecessary risks, or pose a material risk to the Company, particularly in
light of the following factors:
our use of different types of compensation programs, such as equity‑ and cash‑based plans, that provide a balance of long‑ and
short‑term incentives;
our clawback policies, which allow us in certain circumstances in the event of a financial restatement, to seek the recovery of annual
incentive awards, long‑term incentive awards, equity‑based awards and other performance‑based compensation awarded to many of
our employees, including all of our senior executives;
our use of a variety of financial and strategic performance objectives to help ensure that the Company’s overall business strategy is
properly promoted;
our structuring of our compensation programs to include features such as caps on payments, exclusion of certain extraordinary items
and institutional approval of amounts paid; and
our Company’s various policies and procedures and Internal Audit Department, all of which provide checks and balances that help us
monitor risk and identify when an individual is taking excessive or inappropriate risks.
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During 2014, Messrs. Beracha, Berquist, Durham, Ninivaggi and Tamke and Mses. Everson and Fayne Levinson served as members of our
Compensation Committee. None of these individuals: (i) served as an officer or employee of the Company during 2014 or (ii) was formerly an
officer of the Company, with the exception of Mr. Tamke, who was an officer of the Company prior to our initial public offering in 2006.
During the year 2014: (i) none of our executive officers served as a member of a compensation committee (or other body performing a similar role)
of another entity, any of whose executive officers served on our Compensation Committee; (ii) none of our executive officers served as a director
of another entity, any of whose executive officers served on our Compensation Committee; and (iii) none of our executive officers served as a
member of the compensation committee (or other body performing a similar role) of another entity, any of whose executive officers served as one
of our directors.
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EBITDA is defined as net income before net interest expense, income taxes and depreciation (which includes revenue earning equipment lease
charges) and amortization. Corporate EBITDA, as presented herein, represents EBITDA as adjusted for car rental fleet interest, car rental fleet
depreciation and certain other items, as described in more detail in the accompanying tables. Each of the measured presented herein reflects the
financial results of Hertz Holdings.
Management uses EBITDA and Corporate EBITDA as operating performance and liquidity metrics for internal monitoring and planning purposes,
including the preparation of our annual operating budget and monthly operating reviews, as well as to facilitate analysis of investment decisions,
profitability and performance trends. Further, EBITDA enables management and investors to isolate the effects on profitability of operating metrics
such as revenue, operating expenses and selling, general and administrative expenses, which enables management and investors to evaluate our
business segments that are financed differently and have different depreciation characteristics and compare our performance against companies
with different capital structures and depreciation policies. We also present Corporate EBITDA as a
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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