Starwood 2008 Annual Report Download - page 52

3. Change in Control
The following table discloses the amounts that would have become payable on account of an involuntary
termination without cause following a change in control or a voluntary termination with good reason following a
change in control.
Name
Severance
Pay
($)
Medical
Benefits
($)
Vesting of
Restricted Stock
($)
Vesting of
Stock
Options
($)
Outplace-
ment
($)
401(k)
Payment
($)
Tax
Gross Up
($)
Total
($)
van Paasschen(1) ......... 8,000,000 0 1,668,835 0 0 0 3,724,544 13,393,379
Prabhu ................ 3,390,798 47,904 1,734,259 0 128,132 0 0 5,301,093
Siegel ................. 3,405,217 39,398 1,844,649 0 123,006 0 0 5,412,270
Avril ................. 3,332,730 36,576 1,951,530 0 145,000 0 n/a 5,465,836
McAveety .............. 2,250,000 37,824 453,210 0 100,000 0 n/a 2,741,034
Turner ................ 3,125,000 49,776 0 0 125,000 0 n/a 3,299,776
(1) If the amount of severance pay and other benefits payable on change in control is greater than three times certain
base period taxable compensation for Mr. van Paasschen, a 20% excise tax is imposed on the excess amount of
such severance pay and other benefits. Because of Mr. van Paasschen’s recent hire, his base period taxable
compensation does not reflect the total compensation paid to him, artificially increasing the excise tax that
would apply on a change in control and, correspondingly, the tax gross-up payment due under the estimate.
X. DIRECTOR COMPENSATION
The Company uses a combination of cash and stock-based awards to attract and retain qualified candidates to
serve on the Board. In setting Director compensation, the Company considers the significant amount of time that
members of the Board spend in fulfilling their duties to the Company as well as the skill level required by the
Company or its Directors. The current compensation structure is described below.
Under the Company’s Director share ownership guidelines, each Director is required to acquire Shares (or
deferred compensation stock equivalents) that have a market price equal to two times the annual Director’s fees paid
to such Director. New Directors are given a period of three years to satisfy this requirement.
Company employees who serve as members of the Board receive no fees for their services in this capacity.
Non-employee members of the Board (“Non-Employee Directors”) receive compensation for their services as
described below.
A. Annual Fees
Each Non-Employee Director receives an annual fee in the amount of $80,000, payable in four equal
installments of Shares issued under our LTIP. The number of Shares to be issued is based on the fair market value of
a Share on the previous December 31.
A Non-Employee Director may elect to receive up to one-half of the annual fee in cash and to defer (at an
annual interest rate of LIBOR plus 11⁄2% for deferred cash amounts) any or all of the annual fee payable in cash.
Deferred cash amounts are payable in accordance with the Director’s advance election. A Non-Employee Director
is also permitted to elect to defer to a deferred unit account any or all of the annual fee payable in shares of Company
stock. Deferred stock amounts are payable in accordance with the Non-Employee Director’s advance election.
Non-Employee Directors serving as members of the Audit Committee received an additional annual fee in
cash of $10,000 ($25,000 for the chairman of the Audit Committee). The chairperson of each other committee of the
Board received an additional annual fee in cash of $10,000. For 2008, the Chairman of the Board received an
additional retainer of $150,000, payable quarterly in Shares.
In addition, the Board established the following special committees in 2007-2008: (1) Search Committee,
(2) Special Committee, and (3) Transition Committee. In 2008, each member of the Search Committee and Special
Committee received an additional fee of $20,000 ($25,000 for each Chairperson), and each member of the
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