ServiceMagic 2015 Annual Report Download - page 12

TableofContents
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primarilyonanapproachthat,whilebasedonclearobjectives,isnotformulaicandallowsfortheexerciseofdiscretioninsettingfinalbonusamounts.
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Inaddition,weareoftheviewthatlong-termincentivecompensationintheformofequityawardsalignstheinterestsofexecutivesandlong-term
shareholders,andtofurtherthisimportantgoal,equityawardsplayaprominentroleinouroverallcompensationprogram.Wehaveusednon-qualifiedstock
optionsasthepredominantequityincentivevehicleforourexecutivesformanyyears.Weusethisequityincentiveinstrumentprimarilyforthesakeofsimplicity
giventhatthevaluefromstockoptionawardsisdirectlydependentonappreciationintheCompany’sstockpriceandthereforeprovidesanobjectivelymeasurable
goal,andabeliefthatitwould,ingeneral,maketheCompanymorecompetitiveinrecruitingtalentedexecutivesandemployees.Fromtimetotime,however,
executiveshavebeenawardedrestrictedstockunitsinadditionto,orinlieuof,stockoptionawards,dependingontheindividualcircumstances,andin2015oneof
ourexecutiveswasawardedrestrictedstockunitsasdescribedbelow.
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WebelievethattheCompany’sexecutiveofficercompensationprogramputsthesubstantialmajorityofcompensationatrisk,rewardsbothindividualand
corporateperformanceinatargetedfashion,paysamountsappropriatetoattractandretainthosekeyindividualsnecessarytogrowtheCompanyandalignsthe
interestsofourkeyexecutiveswiththeinterestsofourstockholders.Wecontinuouslyevaluateourprogramandmakechangesaswedeemappropriate.
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RolesandResponsibilities
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TheCompensationandHumanResourcesCommitteeoftheCompany’sBoardofDirectors(forpurposesofthisCD&A,the“Committee”)hasprimary
responsibilityforestablishingthecompensationoftheCompany’sexecutiveofficers.AllcompensationdecisionsreferredtothroughoutthisCD&Ahavebeen
madebytheCommittee,based(inpart)onrecommendationsfromMr.DillerandMr.Levin(asdescribedbelow).TheCommitteecurrentlyconsistsof
Mr.RosenblattandMs.Hammer.
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TheexecutiveofficersparticipateinstructuringCompany-widecompensationprogramsandinestablishingappropriatebonusandequitypools.Inearly
2016,Messrs.DillerandLevinmetwiththeCommitteeanddiscussedtheirviewsofcorporateandindividualexecutiveofficerperformancefor2015for
Messrs.KaufmanandWiniarski,andtheirrecommendationsforannualbonusesforthoseexecutiveofficers.Mr.DilleralsodiscussedMr.Levin’sperformance,
andhisviewsonhisownperformance,withtheCommittee.Followingthesediscussions,theCommitteemetinexecutivesessionstodiscussthese
recommendations.Afterconsiderationoftheserecommendations,theCommitteeultimatelydeterminedtheannualbonusamountforeachexecutiveofficer.
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Inestablishingagivenexecutiveofficer’scompensationpackage,eachindividualcomponentisevaluatedindependentlyandinrelationtothepackageas
awhole.Priorearninghistoriesandoutstandinglong-termcompensationarrangementsarealsoreviewedandtakenintoaccount.However,wedonotbelievein
anyformulaicrelationshiportargetedallocationbetweentheseelements.Instead,eachindividual’ssituationisevaluatedonacase-by-casebasiseachyear,
consideringthevarietyofrelevantfactorsatthattime.
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Fromtimetotime,theCommitteehassolicitedtheadviceofconsultingfirmsandengagedlegalcounsel.Exceptasnotedbelow,nosuchconsultingfirms
orlegalcounselwereengagedduring2015.
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Inaddition,fromtimetotime,theCompanymaysolicitsurveyorpeercompensationdatafromvariousconsultingfirms.In2015,theCompanyengaged
Mercer(US)Inc.toprovidecomparativemarketdatainconnectionwiththeCompany’sownanalysisofitsequitycompensationpractices,butneitherMercernor
anyothercompensationconsultantengagedbytheCompanyhadanyroleindeterminingorrecommendingtheamountorformofexecutivecompensationfor
2015.
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In2015,theCommitteeengagedCompensationAdvisoryPartnersLLC(“CAP”)toassisttheCommitteeinitsconsiderationoflong-termincentive
awardsforMr.DillerandMr.Levin,asdiscussedfurtherbelowundertheheading“2015EquityAwards.”
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CompensationElements
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Ourcompensationpackagesforexecutiveofficersprimarilyconsistofsalary,annualbonuses,IACequityawardsand,incertaininstances,perquisitesand
otherbenefits.
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