Starwood 2007 Annual Report Download - page 31

In light of Mr. Prabhu’s accomplishments, he received an “exceeds expectations” performance rating and
was awarded 120% of his individual bonus target. Combined with the 115% financial performance component,
Mr. Prabhu’s 2007 bonus was 117.5% of target.
In December 2007, Mr. Gellein announced his retirement effective no later than March 31, 2008. In
connection with his retirement, the Company amended Mr. Gellein’s employment agreement as more fully
discussed on page 38. As part of the amendment, Mr. Gellein’s bonus for the 2007 performance year was not to
be less than target for the individual performance portion. The Compensation Committee considered
Mr. Gellein’s years of dedicated service to the Company, his role as President Global Development Group
and head of the Company’s vacation ownership subsidiary, and his achievements and awarded Mr. Gellein
100% of his individual bonus target. Combined with the 112% financial performance component for the SVO
business, Mr. Gellein’s 2007 bonus was 106% of target.
Mr. Ouimet’s accomplishments for the 2007 performance year included the following:
• Successfully served as interim leader for marketing, brand management and distribution
• Led each hotel division in exceeding financial targets for each quarter
• Actively managed and strengthened relationships with hotel owners leading to stronger relationships and
growth in the Company’s pipeline
• Directed the Sheraton brand revitalization plan
• Led the restructuring of the marketing division and began planning the restructuring for other groups
In light of Mr. Ouimet’s accomplishments in 2007, he received an “exceeds expectations” performance
rating and was awarded 120% of his individual bonus target. Combined with the 115% financial performance
component, Mr. Ouimet’s 2007 bonus was 117.5% of target.
Mr. Van Paasschen joined Starwood in September 2007. Pursuant to his employment agreement, Mr.
Van Paasschen was entitled to receive at least a pro-rata portion of his target bonus for the 2007 performance
period. The Compensation Committee considered Mr. Van Paasschen’s immediate impact on the Company
and awarded him a bonus of $538,400, the minimum amount permissible under his employment agreement.
Mr. Heyer resigned as Chief Executive Officer effective March 31, 2007. Since he was not employed at
the end of the performance period and pursuant to his separation agreement, Mr. Heyer received no incentive
compensation for the 2007 performance year.
Following Mr. Heyer’s resignation, Bruce Duncan assumed the role of Chief Executive Officer on an
interim basis. As part of Mr. Duncan’s employment agreement, he was entitled to a pro-rated bonus at target in
the event that he remained in the role of Chief Executive Officer for at least three months. Mr. Duncan served as
Chief Executive Officer for approximately six months and was awarded a bonus of $960,000 pursuant to the
terms of his employment agreement.
Overall, the Compensation Committee paid the majority of the Named Executive Officers individual
bonuses that were above target in consideration of outstanding individual performance, recognition of
expanded roles and responsibilities in light of other executive departures.
Conclusion.
Viewed on a combined basis once minimum performance is attained, the annual incentive payments
attributable to both Company financial and strategic/operational performance range from 0% - 187.5% of
target for the Named Executive Officers, other than the Chief Executive Officer.
Equity awards are generally granted in February of each year following the announcement of the
Company’s earnings for the previous year. Performance reviews and bonus awards for the prior operating year
are made at that time. In determining the equity awards granted in 2007, the Compensation Committee
considered and took into account the Company’s performance and the individual performance of each Named
Executive Officer in 2006 as well as the expected performance of the Company for 2007. In addition, the
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