Starwood 2007 Annual Report Download - page 26

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EXECUTIVE COMPENSATION
I. COMPENSATION DISCUSSION AND ANALYSIS
A. Overview of Starwood’s Executive Compensation Program
1. Program Objectives and Other Considerations
Objectives. As a consumer lifestyle company with a branded hotel portfolio at its core, the Company
operates in a competitive, dynamic and challenging business environment. In step with this mission and
environment, the Company’s executive compensation program for our principal executive officer, principal
financial officer and the other executive officers whose compensation is reported in this proxy (our “Named
Executive Officers”) has the following key objectives:
•Attract and Retain: We seek to attract and retain talented executives from within and outside the
hospitality industry who understand the importance of innovation, brand enhancement and consumer
experience. We are working to reinvent the hospitality industry, and one element of this endeavor is to bring
in key talent from other industries. Therefore, overall program competitiveness must take these other
markets into account.
•Motivate: We seek to motivate our executives to sustain high performance and achieve Company financial
and strategic/operational goals over the course of business cycles and various market conditions.
•Align Interests: We endeavor to align the interests of stockholders and our executives by tying executive
compensation to the Company’s business results and stock performance. Moreover, we strive to keep the
executive compensation program transparent, easily understood, in line with market practices and consistent
with high standards of good corporate governance.
What the Program Intends to Reward. Our executive compensation program is strongly weighted toward
variable compensation tied to Company results. Specifically, our compensation program for Named Executive
Officers is designed to reward the following:
•Alignment with Stockholders: A significant portion of Named Executive Officer compensation is delivered
in the form of equity, ensuring that long term compensation is strongly tied to stockholder returns.
•Achievement of Company Financial Objectives: A portion of Named Executive Officer compensation is
tied directly to the Company’s financial performance.
•Achievement of Strategic/Operational Objectives. A portion of Named Executive Officer compensation is
tied to achievement of specific individual objectives that are directly aligned with execution of our business
strategy. These objectives may be related to, among others, operational excellence, brand enhancement,
innovation, growth, customer experience and/or teamwork.
•Overall Leadership and Stewardship of the Company: Leadership, teambuilding, and development of
future talent are key success factors for the Company and a portion of compensation for the Named
Executive Officers is dependent on satisfaction of enumerated leadership competencies.
2. Roles and Responsibilities
Our Compensation and Option Committee (“Compensation Committee”) is responsible for, among other
things, the establishment and review of compensation policies and programs for our executive officers and ensuring
that these executive officers are compensated in a manner consistent with the objectives and principles outlined
above. It also monitors the Company’s executive succession plan, reviews and monitors the Company’s
performance as it affects the Company’s employees and the overall compensation policies for the Company’s
employees.
The Compensation Committee makes all compensation decisions for our Named Executive Officers. Our
Chief Executive Officer, together with the Chief Administrative Officer, annually reviews the performance of each
other Named Executive Officer and presents to the Compensation Committee his conclusions and
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