Starwood 2007 Annual Report Download - page 18

considered the fact that Mr. Duncan served as Chief Executive Officer on an interim basis from April 1, 2007 to
September 24, 2007 and received a salary and other benefits for his services. Prior to serving as Chief Executive
Officer on an interim basis, the Board determined that Mr. Duncan was an independent director. Yahoo! Inc.,
Amazon.com, Inc., Gap, Inc. and American Express Company, where Messrs. Hippeau, Mr. Ryder and Youngblood
and Ambassador Barshefky are directors, respectively, are the only companies to transact business with the
Company over the past three years in which any of the Company’s independent directors served as a director,
executive officer or is a partner, principal or greater than 10% stockholder. In the case of each of Yahoo! Inc.,
Amazon.com, Inc. and Gap, Inc., the combined annual payments from the Company to each such entity and from
each such entity to the Company has been less than .01% of the Company’s and/or each such other entity’s annual
consolidated revenues for each of the past three years. In the case of American Express Company, with which the
Company co-brands the American Express Starwood Preferred Guest credit card, the combined annual payments
from the Company to American Express Company and from American Express Company to the Company has been
less than .01% of American Express Company’s annual consolidated revenues for each of the past three years and
payments from American Express were slightly more than 2% of the Company’s annual consolidated revenues for
2006 and less than 2% for 2007 and 2005. Ambassador Barshefsky serves solely as a director of American Express
and derives no personal benefit from these payments. These relationships are consistent with the NYSE
independence standards. In addition, in the case of Mr. Quazzo, the Board considered that in January 2008 a
fund managed by Transwestern Investment Company, LLC purchased the office building in Phoenix where the
Company maintains an office. The Company’s lease for the office space was negotiated and entered into prior to the
acquisition with unaffiliated third parties at arms-length and was not amended in connection with the acquisition of
the building by the fund. Mr. Quazzo has informed the Company that he did not derive any direct personal benefit
from the office space lease, although his compensation does depend, in part, on Transwestern’s Investment
Company, LLC’s results of operations.
Mr. Duncan, who was an independent director prior to his interim appointment as Chef Executive Officer, has
served as non-executive Chairman of the Board since May 2005 until March 31, 2007 when he was appointed Chief
Executive Officer on an interim basis, and from September 24, 2007 to the present. As a result, prior to March 31,
2007 and following September 24, 2007, the Board did not have a “lead” Director but Mr. Duncan, as Chairman, ran
meetings of the Board. During Mr. Duncan’s appointment as Chief Executive Officer on an interim basis, the
Chairman of the Governance and Nominating Committee served as the lead director at the executive meetings of the
Board. Mr. Quazzo, an independent director, served as the Chairman of the Governance and Nominating Committee
in 2007.
The Company has adopted a policy which requires the Audit Committee to approve the hiring of any current or
former employee (within the last 5 years) of the Company’s independent registered public accounting firm into any
position (i) as a manager or higher, (ii) in its accounting or tax departments, (iii) where the hire would have direct
involvement in providing information for use in its financial reporting systems, or (iv) where the hire would be in a
policy setting position. When undertaking its review, the Audit Committee considers applicable laws, regulations
and related commentary regarding the definition of “independence” for independent registered public accounting
firms.
The Board has a policy under which Directors who are not employees of the Company or any of its subsidiaries
may not stand for re-election after reaching the age of 72. In addition, under this policy, Directors who are
employees of the Company must retire from the Board upon their retirement from the Company. Pursuant to the
Corporate Governance Guidelines, the Board also has a policy that directors who change their principal occupation
(including through retirement) should voluntarily tender their resignation to the Board.
The Company expects all Directors to attend the Annual Meeting and believes that attendance at the Annual
Meeting is as important as attendance at meetings of the Board of Directors and its committees. In fact, the
Company typically schedules Board of Directors’ and committee meetings to coincide with the dates of its Annual
Meetings. However, from time to time, other commitments prevent all Directors from attending each meeting. All
Directors attended the most recent annual meeting of stockholders, which was held on May 24, 2007.
The Company has adopted a policy which permits stockholders and other interested parties to contact the
Board of Directors. If you are a stockholder or interested party and would like to contact the Board of Directors you
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