Starwood 2009 Annual Report Download - page 35

operational goals for the year. The Compensation Committee also determines, based on management’s report,
the extent to which the Company’s financial performance goals were achieved and whether the Company
achieved the applicable minimum threshold(s) required to pay awards. The Chief Executive Officer also meets
in executive session with the Board of Directors to inform the Board of his performance assessments regarding
the Named Executive Officers and the basis for the compensation recommendations he presented to the
Compensation Committee.
The evaluation of Mr. van Paasschen and the other Named Executive Officers with respect to each
executive’s strategic/operational goals for 2009 is described below.
Mr. van Paasschen’s accomplishments for the 2009 performance year included the following:
• Strengthened the Company’s financial position by reducing the Company’s total debt by approximately
$1 billion (from $4 billion to $3 billion) through multiple assets sales and lower capital expenditures, and
extended the Company’s maturities so that no debt is due before 2012;
• Continued cost reduction efforts within the organization, including a redesign of the expatriate benefit
structure and our healthcare and other benefits programs offered in the United States;
• Progressed an innovation agenda that included a revitalization of the Sheraton brand, global roll-out of the
W brand, and the introductions of our newest brands Aloft and Element, the latter of which is the world’s first
major hotel brand to mandate that all its properties pursue the U.S. Green Building Council’s (USGBC)
Leadership in Energy and Environmental Design (LEED) certification;
• Furthered strong growth in the Company’s hotel portfolio by opening 83 new hotels and signing agreements
for an additional 77 new hotels and 36 re-engagements or changes to ownership involving existing
hotels; and
• Achieved increased employee satisfaction scores despite the economic climate, built a sense of identity and
cohesion among the Company’s top 100 managers and maintained stability of personnel in our key positions.
In light of Mr. van Paasschen’s accomplishments and impact on the Company, the Compensation
Committee awarded him a payout at 85% of target for the strategic/operational portion of the annual bonus, for
a total annual bonus of $1,700,000 for 2009, representing 85% of his overall annual bonus target. In addition,
Mr. van Paasschen was awarded a special bonus enhancement of $800,000 for addressing the Company’s
liquidity, balance sheet, cost structure and competitive positioning as the Company navigated through an
industry recession. In awarding this special bonus enhancement, the Compensation Committee also consid-
ered Mr. van Paasschen’s accomplishments for the 2009 performance year, as well as the maximum incentive
amount, in dollars, that could be awarded to Mr. van Paasschen for such period under the Executive Plan
(which amount has not been exceeded).
Mr. Avril’s accomplishments for the 2009 performance year included the following:
• Led cost reduction efforts of overhead expenses at our divisional offices and owned properties in light of the
difficult economic climate and recession in the hotel industry, which resulted in cost savings of approx-
imately $74 million beyond expected savings from lower occupancies;
• Effectively managed issues arising from distressed properties within the Company’s hotel network to
provide needed assistance to our owners while minimizing financial exposure to the Company;
• Led global initiatives to strengthen the Company’s revenue management capabilities, including improving
the Company’s proprietary software known as TLPe, enhancing the training and development of revenue
managers and accelerating the global deployment and installation of the improved system at our hotels;
• Achieved increased customer satisfaction scores with both retail consumers and meeting planners in
Company survey measures despite the tough economic climate; and
• Developed key relationships with hotel owners, joint venture partners and our Company’s personnel to drive
an enhanced guest experience, better owner relations, and the retention of essential personnel.
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