Starwood 2007 Annual Report Download - page 30

For the 2007 performance period, EBITDA for purposes of determining bonuses was $1,356,000 (which
exceeded the EP Threshold). Actual results for earnings per share, Company operating income and SVO net
income were $2.71, $982,100,000 and $196,800,000, respectively. Using the metrics described above resulted
in a payout at 115% of target for the Company performance portions of bonuses for the 2007 performance
period for the Named Executive Officers other than Mr. Gellein. For Mr. Gellein, the financial performance
component was paid at 112% of target.
Strategic/Operational Goals.
The strategic/operational performance goals for Named Executive Officers under the Executive Plan
consists of “Big 5” and leadership competency objectives that link individual contributions to execution of our
business strategy and major financial and operating goals. “Big 5” refers to each executive’s specific
deliverables within the Company’s critical performance categories — operational excellence, brand enhance-
ment, innovation, growth, and customer experience. As part of a structured process that cascades down
throughout the Company, these objectives are developed at the beginning of the year, and they integrate and
align an executive with the Company’s strategic and operational plan. Achievement of “Big 5” objectives
typically accounts for 80% of the strategic/operational performance evaluation, and achievement of leadership
competency objectives typically accounts for 20% of such evaluation. The portion of annual incentive awards
attributable to strategic/operational/talent management performance represents 40% of Mr. Van Paasschen’s
total target opportunity and 50% of the total target opportunities for the other Named Executive Officers.
Actual incentives paid to Named Executive Officers for strategic/operational performance may range from 0%
to 175% of the pre-determined target amount for this category of performance. The evaluation process for Mr.
Van Paasschen and the other Named Executive Officers with respect to each executive’s strategic/operational
goals is described below.
Mr. Siegel’s individual accomplishments for the 2007 performance year included the following:
• Successfully completed labor negotiations with unions without any work stoppages
• Actively managed and supported the deal development process at a lower average cost than 2006 (while
significantly reducing outside counsel spend)
• Lead the creation of a brand compliance function with new assessment methodology and performance
management program.
• Significantly enhanced Starwood’s ethics and compliance programs, implementing a low cost computer
based training program for associates
• Assumed day to day responsibility for the Human Resources organization while continuing full time role as
General Counsel and maintained benefit programs at a lower cost while raising overall employee satisfaction
In light of Mr. Siegel’s accomplishments, he received an “exceeds expectations” performance rating and
was awarded 145% of his individual bonus target. Combined with the 115% financial performance component,
Mr. Siegel’s 2007 bonus was 130% of target.
Mr. Prabhu’s accomplishments for the 2007 performance year included the following:
• Delivered financial results that exceeded the budget for each quarter
• Completed asset sale program announced in 2007 generating significant amount of net proceeds
• Successfully delivered a company income tax rate and property tax rate on the Company’s owned hotels
below the target set
• Led the management team responsible for a major upgrade of key reservation systems and implemented
other key IT initiatives
• Ensured adequate liquidity to fund operations at optimal cost, enhanced cash management, devised
strategies to repatriate offshore cash and maintained an optimal balance between short/long term and
fixed/variable cost debt
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