Starwood 2011 Annual Report Download - page 32

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•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 the execution of our
business strategy. These objectives may be related to, among others, operational excellence, brand
enhancement, innovation, growth, cost containment/efficiency, 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 Named Executive Officer
compensation is dependent on satisfaction of core leadership competencies.
2. Roles and Responsibilities
The Compensation Committee is responsible for, among other things, the establishment and review of
compensation policies and programs for our executive officers and ensuring that the executive officers are
compensated in a manner consistent with the objectives and principles outlined above. It also monitors the
Company’s executive succession plan, and 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 with respect to our Named Executive
Officers. Our Chief Executive Officer, together with the Chief Human Resources Officer, reviews the
performance of each other Named Executive Officer and presents to the Compensation Committee his
conclusions and recommendations, including salary adjustments and annual incentive compensation amounts (as
described in more detail in the Annual Incentive Compensation section beginning on page 25 of this proxy
statement). The Compensation Committee may exercise its discretion in modifying any recommended salary
adjustments or awards to these executives.
The role of the Company’s management is to provide reviews and recommendations for the Compensation
Committee’s consideration, and to manage operational aspects of the Company’s compensation programs,
policies and governance. Direct responsibilities include, but are not limited to, (i) providing an ongoing review of
the effectiveness of the compensation programs, including competitiveness, and alignment with the Company’s
objectives, (ii) recommending changes, if necessary, to ensure achievement of all program objectives and
(iii) recommending pay levels, payout and/or awards for executive officers other than the Chief Executive
Officer. Management also prepares tally sheets which describe and quantify all components of total
compensation for our Named Executive Officers, including salary, annual incentive compensation, long-term
incentive compensation, deferred compensation, outstanding equity awards, benefits, perquisites and potential
severance and change in control payments. The Compensation Committee reviews and considers these tally
sheets in making compensation decisions for our Named Executive Officers.
The Compensation Committee directly engaged Meridian Compensation Partners, LLC (“Meridian”) to
assist it in the review and determination of compensation awards to the Named Executive Officers (including the
Chief Executive Officer) for the 2011 performance period, as well as the annual fees or other compensation paid
to our Board. Meridian worked with management and the Compensation Committee in reviewing the
compensation structure of the Company and of the companies in the peer group. Meridian does not provide any
services to the Company.
At last year’s annual meeting, we provided our stockholders with the opportunity to cast a non-binding
advisory vote regarding the compensation of our named executive officers as disclosed in the proxy statement for
the 2011 Annual Meeting of Stockholders. Our stockholders overwhelmingly approved the proposal, with more
than 96% of the votes cast in favor of the proposal. We also asked our stockholders to indicate if we should hold
a “say-on-pay” vote every one, two or three years. Consistent with the recommendation of our Board, our
stockholders indicated by non-binding advisory vote their preference to hold a “say-on-pay” vote annually. After
consideration of the 2011 voting results, and based upon its prior recommendation, our Board of Directors
elected to hold “say-on-pay” votes on an annual basis. In addition, the Compensation Committee
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