Starwood 2012 Annual Report Download - page 74

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.-2013Proxy Statement68
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pre-Approval of Services
The Audit Committee pre-approves all services, including both audit
and non-audit services, provided by the Company’s independent
registered public accounting fi rm. The independent registered
public accounting fi rm submits an audit services fee proposal,
which also must be approved by the Audit Committee before the
audit commences. The Audit Committee may delegate authority
to one of its members to pre-approve all audit/non-audit services
by the independent registered public accounting fi rm, as long as
these approvals are presented to the full Audit Committee at its
next regularly scheduled meeting.
Management submits to the Audit Committee all non-audit
services that it recommends the independent registered public
accounting fi rm be engaged to provide and an estimate of the
fees to be paid for each. Management and the independent
registered public accounting fi rm must each confi rm to the Audit
Committee that the performance of the non-audit services on the list
would not compromise the independence of the registered public
accounting fi rm and would be permissible under all applicable legal
requirements. The Audit Committee must approve both the list of
non-audit services and the budget for each such service before
commencement of the work. Management and the independent
registered public accounting fi rm report to the Audit Committee at
each of its regular meetings as to the non-audit services actually
provided by the independent registered public accounting fi rm and
the approximate fees incurred by the Company for those services.
All audit and permissible non-audit services provided by Ernst&
Young LLP to the Company for the fi scal years ended December31,
2012 and 2011 were pre-approved by the Audit Committee or
our Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS
ANDINSIDER PARTICIPATION
The members of the Compensation Committee during fi scal
year 2012 were all independent directors, and no member was
an employee or former employee of the Company. None of
the Compensation Committee members had any relationship
requiring disclosure under the Related Person Transaction Policy
described below. During fi scal year 2012, none of our executive
offi cers served on the compensation committee (or its equivalent)
or board of directors of another entity whose offi cer served on our
Compensation Committee.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
The Board of Directors has adopted a Corporate Opportunity and
Related Person Transaction Policy (the “Related Person Transaction
Policy”), the purpose of which is to address the reporting, review
and approval or ratifi cation of transactions with directors, director
nominees, executive offi cers, stockholders known to own of
record or benefi cially more than fi vepercent of our shares (“5%
Holders”) and each of the foregoing’s respective family members
and/or corporate affi liates (collectively “Covered Persons”). As a
general matter, we seek to avoid Related Person Transactions
because they can involve potential or actual confl icts of interest
and pose the risk that they may be, or be perceived to be, based
on considerations other than the Company’s best interests. For
purposes of the policy, a “Related Person Transaction” means any
transaction involving the Company in which a Covered Person
has a direct or indirect material interest. A transaction involving
entities controlled by the Company shall be deemed a transaction
in which the Company participates. However, we recognize that in
some circumstances transactions between us and related persons
may be incidental to the normal course of business or provide an
opportunity that is in the best interests of the Company, or that
is not inconsistent with the best interests of the Company, or is
more effi cient to pursue than an alternative transaction. The Board
has charged the Governance Committee with establishing and
periodically reviewing our Related Person Transaction Policy. A
copy of the policy is posted on our website at www.starwoodhotels.
com/corporate/about/investor/governance.html.