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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K/A
(Amendment No. 1)
(Mark One)
xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2015
Or
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
Commission File Number 1-7959
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Maryland 52-1193298
(State or Other Jurisdiction of
Incorporation or Organization)
(IRS Employer
Identification No.)
One StarPoint
Stamford, CT 06902
(Address of Principal Executive Offices) (Zip Code)
(203) 964-6000
Registrant’s Telephone Number, Including Area Code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of each exchange on which registered:
Common stock, par value $0.01 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. x Yes ¨No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes xNo
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x
Yes ¨No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). x Yes ¨ No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the
best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the
definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x
Accelerated filer ¨
Non-accelerated filer ¨
(Do not check if a
smaller reporting company)
Smaller reporting company ¨
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes xNo
As of the last business day of the registrant’s most recently completed second fiscal quarter, June 30, 2015, the aggregate market value of the registrant’s voting and
non-voting common equity held by non-affiliates of the registrant computed by reference to the closing sales price as quoted on the New York Stock Exchange was
approximately $13.8 billion. As of April 5, 2016, the registrant had 168,551,178 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None

Table of contents

  • Page 1
    ... StarPoint Stamford, CT (Address of Principal Executive Offices) 52-1193298 (IRS Employer Identification No.) (203) 964-6000 Registrant's Telephone Number, Including Area Code 06902 (Zip Code) Securities registered pursuant to Section 12(b) of the Act: Title of each class: Common stock, par value...

  • Page 2
    ... No. 1 to Annual Report on Form 10-K/A For the Fiscal Year Ended December 31, 2015 Explanatory Note Part III Item 10. Item 11. Item 12. Item 13. Item 14. Part IV Item 15. Page 1 Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial...

  • Page 3
    ... September 2014, and as Senior Vice President & Chief Financial Officer of Armstrong World Industries, Inc. from February 2010 to November 2013. Mr. Mangas spent 20 years at The Procter & Gamble Company, a global consumer packaged goods company, in progressively senior roles and, from August 2008 to...

  • Page 4
    ... professional career with The Procter & Gamble Company, a global consumer packaged goods company, joining the company in 1974, and he has held a number of key accounting and finance positions including Vice Chairman and Chief Financial Officer of Procter & Gamble; Comptroller, U.S. Operations of...

  • Page 5
    ... Chief Operating Officer of Pizza Hut from 1996. Mr. Lewis is also currently a director of The Walt Disney Company. Mr. Lewis has been a director of the Company since 2013 and currently serves on the Audit Committee and Capital Committee. We believe Mr. Lewis' senior leadership experience, including...

  • Page 6
    ... the Disney brand to a range of merchandise; and Vice President of Global Staffing, Training and Development for ITT Sheraton Corporation, a hotel company. Mr. Cava is also a member of the board of directors and has chaired the compensation committee of The Society for Human Resources Management...

  • Page 7
    ... May 1996, Mr. Turner was a member of the Investment Banking Department of Salomon Brothers, based in both New York and London. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires that our directors and certain of our officers, and persons who own more...

  • Page 8
    ... is currently comprised of Messrs. Daley (chairperson), Hippeau, Lewis and Quazzo and Ambassador Barshefsky, all of whom are "independent" directors, as determined by the Board in accordance with New York Stock Exchange (or NYSE) listing requirements and applicable federal securities laws. The Board...

  • Page 9
    ... and managed properties, vacation ownership resorts and corporate offices. We conduct our hotel and leisure business both directly and through our subsidiaries. As of December 31, 2015, we also owned and operated a vacation ownership business, primarily conducted through Starwood Vacation Ownership...

  • Page 10
    ...executive officers was again designed to increase as our performance goals were achieved and as our stock price increased. Actual levels of total compensation for these named executive officers, in particular their annual incentive payouts received at 102% of target for the Company financial portion...

  • Page 11
    ... value. What the Program Intends to Reward. In general, our executive compensation program is strongly weighted towards variable compensation tied to our annual business results and stock performance. Specifically, our compensation program for our named executive officers is designed to help...

  • Page 12
    ... 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. In early 2015, the Compensation Committee reviewed and considered...

  • Page 13
    ... Perquisites • Retirement benefits in the form of a tax-qualified 401(k) plan, a non-qualified deferred compensation plan, a savings restoration plan, standard health and welfare benefits, and limited perquisites in the form of relocation assistance, car service and corporate aircraft use (for...

  • Page 14
    ... section entitled Use of Peer Data below in this report for a list of the peer companies used in this analysis. We generally seek to position base salaries of our named executive officers at or near the median base salary of our peer group for similar positions, but also review the range of values...

  • Page 15
    ...the Annual Incentive Plan for 2015 were he to remain employed for the entirety of 2015 based on actual performance results. We believe that the structure described above allowed us to provide each participating named executive officer with substantial incentive compensation opportunities for 2015 if...

  • Page 16
    ... Executive Plan despite his departure from the Company on December 30, 2015). However, subject to attaining the EP Threshold for 2015, pro rata awards could be paid at the discretion of the Compensation Committee in the event of death, disability, retirement or other prior termination of employment...

  • Page 17
    ...in value to one-sixth of the award the Compensation Committee determined he would have earned under the Annual Incentive Plan based on actual Company financial performance were he to remain employed for the entirety of 2015). The table below sets forth for each metric the performance levels for 2015...

  • Page 18
    ... have earned under the Annual Incentive Plan for 2015 were he to remain employed for the entirety of 2015. Evaluation Process. In February 2016, Mr. Mangas, as Chief Executive Officer, along with Jeff Cava, the Company's Executive Vice President and Chief Human Resources Officer, and with oversight...

  • Page 19
    ... sale process of SVO, which culminated in the execution of a separation and merger agreement with ILG. Ms. Poulter's key accomplishments for the 2015 performance year: • Supported business growth, including the creation of the technology platform for the launching of the Design Hotels partnership...

  • Page 20
    ... amount. This incentive opportunity level was set at the target annual incentive level established for other Company employees within the same salary range (or band) as Mr. Schnaid. This level is checked by the Company for general purposes against market every one to three years by using the Towers...

  • Page 21
    ...continued to perform his duties as Corporate Controller and Principal Accounting Officer while assisting Mr. Mangas in his transition to Chief Financial Officer. 2014 One-Time Cash Retention Payment for Ms. Poulter . As an additional portion of Ms. Poulter's new hire compensation package designed to...

  • Page 22
    ... objectives and expectations. Our performance shares are designed to: • Keep our long-term equity incentive program in line with best practices; • Link executive reward opportunities to our performance, especially in relation to peer companies; • Support global strategic business objectives...

  • Page 23
    ... of the award value by the closing price of a share as of the day prior to the grant date. Based on the factors set forth above, including our performance, and the individual performance of each named executive officer in 2014 (as discussed in our 2015 proxy statement), the Compensation Committee...

  • Page 24
    ... paid to such named executive officers in February 2016. The number of performance shares each such named executive officer earned was based on the relative TSR performance of the Company over the three-year performance period ended on December 31, 2015. The peer group against which TSR was compared...

  • Page 25
    ...the 2015 Summary Compensation Table below in this report. The executive is fully and personally responsible, however, for any associated tax liability under the terms of his employment agreement or arrangement. Retirement Benefits. We maintain a tax-qualified retirement savings plan pursuant to Code...

  • Page 26
    ... trigger" event as described in the section entitled Potential Payments Upon Termination or Change in Control below in this report. We believe benefit levels have been set to be competitive with peer group practices. Employment Arrangements with Named Executive Officers Employment Agreement with Mr...

  • Page 27
    ... agreement provided for severance compensation upon a qualifying termination of employment that included, among other things, a lump sum equal to two times Mr. Mangas' base salary and the average of the annual bonuses earned by Mr. Mangas in the three fiscal years ending prior to the fiscal year...

  • Page 28
    ... restrict or limit any long-term incentive award to any participant under the LTIP, including executive officers, if the Compensation Committee determines that such participant engaged in misconduct. Background Information on the 2015 Executive Compensation Program Use of Peer Data In determining...

  • Page 29
    ... set of comparative purposes for 2015, including levels of total compensation for executives and directors, pay mix, incentive plan design and equity usage and other terms of employment. We believe that by conducting the competitive analysis using a broad peer group, which includes companies outside...

  • Page 30
    ... salary multiple in connection with his promotion to Chief Executive Officer), were in compliance with share ownership guidelines as of December 31, 2015. Equity Grant Practices Timing of Equity Grants. For 2015, the Compensation Committee made annual equity compensation grants on February 27, 2015...

  • Page 31
    ..., arising out of our compensation programs. In February 2016, management, including our Chief Financial Officer, our Chief Administrative Officer, General Counsel and Secretary and our Chief Human Resources Officer, reviewed and assessed the risk profile of our compensation programs. Meridian also...

  • Page 32
    ... Company employees eligible to receive an annual incentive for any given year. The Executive Plan also specifies a maximum incentive amount, in dollars, that may be paid to any executive officer for any 12-month performance period. In addition, under our design and operation of the Executive Plan...

  • Page 33
    ... guidelines and by required approval authorities. In addition, we engage an external compensation consulting firm for design and review of our compensation programs, as well as external legal counsel to assist us with the periodic review of our compensation plans to ensure compliance with applicable...

  • Page 34
    ... Incentive Plan Compensation ($) (4) 847,875 43,750 Name and Principal Position Thomas B. Mangas Chief Executive Officer (Former Chief Financial Officer) Martha C. Poulter Chief Information Officer Sergio D. Rivera President, The Americas Alan M. Schnaid Chief Financial Officer Simon M. Turner...

  • Page 35
    ...potential values of the awards granted to the named executive officers for annual incentive awards for 2015. See the section entitled 2015 Incentive Compensation above in this report for more information about these awards. Represents the potential number of performance shares...

  • Page 36
    ... for each named executive officer. The market value of the stock awards is based on the closing price of a share on December 31, 2015, the last business day of the fiscal year, which was $69.28. Option Awards Stock Awards Equity Incentive Market Plan Awards: Value of Number of Shares or Unearned...

  • Page 37
    ...shares acquired in 2015 on account of the vesting of restricted stock units. The table also discloses the value realized by each named executive officer for each such event, calculated prior to the deduction of any applicable withholding taxes and brokerage commissions. Option Awards Number of Value...

  • Page 38
    ... On October 22, 2013, we established the Starwood Savings Restoration Plan (or Restoration Plan) for the benefit of certain eligible employees, including our named executive officers. Under the Restoration Plan, we will make contributions to participants who, for each calendar year beginning on or...

  • Page 39
    ... based on the annual 30-year Treasury Securities rate of interest (or such other deemed investment as the Restoration Plan administrator may designate). The vested balance in a participant's account generally will be distributed in the form of a single cash payment (subject to any applicable tax and...

  • Page 40
    ...her base salary plus the average of the annual incentives earned by the executive (or, with respect to the 2014 fiscal year for Mr. Mangas, the non-pro-rated target annual incentive) in the three fiscal years ending immediately prior to the fiscal year in which the termination occurs (in the case of...

  • Page 41
    ... level, of the individual and corporate performance goals established with respect to such award, prorated based upon the number of days employed during such year; • for Messrs. Rivera and Turner, subject to the terms of their equity awards, immediate vesting of stock options and restricted stock...

  • Page 42
    ... price of a share on December 31, 2015, the last business day of the fiscal year, which was $69.28. The tables do not include amounts shown on the 2015 Nonqualified Deferred Compensation Plan Table or benefits available generally to salaried employees, such as distributions under our Savings Plan...

  • Page 43
    ... of Stock Options ($) (3) - - 48,419 - 201,768 Name Mangas Poulter Rivera Schnaid Turner (1) Includes values for holdings of unvested restricted stock and restricted stock units. (2) Represents the value of the performance shares based on actual performance as of December 31, 2015...

  • Page 44
    ...under the 2014 Award, as determined based on actual performance. To the extent Mr. van Paasschen has account balances under the Deferred Compensation Plan or the Savings Plan (as discussed in the section entitled 2015 Nonqualified Deferred Compensation Table above in this report), such balances will...

  • Page 45
    ... is described below. For 2015, under our director share ownership guidelines, each non-employee director (or Non-Employee Director) was required to own shares (or deferred compensation stock equivalents) having a market price equal to four times the annual Non-Employee Director fees paid to such Non...

  • Page 46
    ...; Legacy Discounted Hotel Rates In 2015, each Non-Employee Director received a grant of 750,000 SPG Program points to encourage them to visit and personally evaluate our properties. In addition, beginning in 2015, any Non-Employee Director who has achieved at least 10 years of service on the Board...

  • Page 47
    ...information, refer to Note 20 of our financial statements filed with the SEC as part of the Form 10-K for the year ended December 31, 2015. These amounts reflect the grant date fair value for these awards and do not correspond to the actual value that will be recognized by the Non-Employee Directors...

  • Page 48
    ... During fiscal year 2015, none of our executive officers served on the compensation committee (or its equivalent) or board of directors of another entity whose officer served on our Compensation Committee or Board of Directors. Item 12. Security Ownership of Certain Beneficial Owners and Management...

  • Page 49
    ..., and resigned as our Chief Executive Officer and as a member of our Board on December 30, 2015. Less than 1%. Includes the following number of "phantom" stock units received as a result of the following directors' election to defer directors' annual fees: 4,884 for Ambassador Barshefsky; 828 for Mr...

  • Page 50
    ...-average exercise price is representative of outstanding stock option awards only. (3) All of these shares may be used for awards other than upon the exercise of an option, warrant or right. In addition, 9,631,558 shares remain available for issuance under our Employee Stock Purchase Plan, a stock...

  • Page 51
    ... has adopted a Corporate Opportunity and Related Person Transaction Policy (or Related Person Transaction Policy), the purpose of which is to address the reporting, review and approval or ratification of transactions with directors, director nominees, executive officers, stockholders known to own of...

  • Page 52
    ... to the directors upon request. This policy is also posted on our website at www.starwoodhotels.com/corporate/about/investor/ governance.html. Item 14. Principal Accounting Fees and Services . The aggregate amounts billed to the Company for the fiscal years ended December 31, 2015 and 2014 by the...

  • Page 53
    ... alternatives review. The Company has adopted a policy which requires the Audit Committee of the Board of Directors to approve the hiring of any current or former employee (within the last five years) of the Company's independent registered public accounting firm into any position (i) as a manager...

  • Page 54
    ...'s Registration Statement on Form S-3 (Commission File Number 333-07221) filed November 13, 1996). First Indenture Supplement, dated as of December 31, 1998, among ITT Corporation, the Company and The Bank of New York (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form...

  • Page 55
    ...and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K (Commission File Number 00107959) filed with the SEC on September 15, 2014). Third Amended and Restated Limited Partnership Agreement of SLC Operating...

  • Page 56
    ... agent, Citigroup Global Markets Inc., as syndication agent, Bank of America, N.A., HSBC Bank USA, National Association and Wells Fargo Bank, National Association, as documentation agents (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (Commission File Number...

  • Page 57
    ... Company's Annual Report on Form 10-K (Commission File Number 001-07959) for the fiscal year ended December 31, 2002 (or the 2002 Form 10K)). * Form of Restricted Stock Agreement pursuant to the 2002 LTIP (incorporated by reference to Exhibit 10.35 to the 2004 Form 10-K). * Starwood Hotels & Resorts...

  • Page 58
    ... 22, 2008 (incorporated by reference to Exhibit 10.35 to the Company's Annual Report on Form 10-K (Commission File Number 001-07959) for the fiscal year ended December 31, 2007). * Starwood Hotels & Resorts Worldwide, Inc. 2013 Long-Term Incentive Compensation Plan (or 2013 LTIP) (incorporated...

  • Page 59
    ...Q1). * Retirement Agreement and Mutual General Release of Claims by and between Starwood International Licensing Company, S.A.R.L., Starwood Hotels & Resorts Worldwide, Inc. and Matthew E. Avril, dated as of April 12, 2012 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on...

  • Page 60
    ...the 2013 Form 10-K). * Starwood Savings Restoration Plan (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q (Commission File Number 001-07959) for the quarterly period ended September 30, 2013). * Employment Agreement, dated May 7, 2014, between the Company and...

  • Page 61
    ... 18 of the United States Code - Chief Financial Officer (incorporated by reference to Exhibit 32.2 to the 2015 Form 10-K). The following materials from Starwood Hotels & Resorts Worldwide, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015 formatted in XBRL (eXtensible Business...

  • Page 62
    ... duly authorized. STARWOOD HOTELS & RESORTS WORLDWIDE, INC. By: / S / T HOMAS B. M ANGAS Thomas B. Mangas Chief Executive Officer Date: April 29, 2016 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of...

  • Page 63
    ... TO RULE 13a-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934 I, Thomas B. Mangas, certify that: 1) 2) I have reviewed this Amendment No. 1 to the annual report on Form 10-K of Starwood Hotels & Resorts Worldwide, Inc.; and Based on my knowledge, this report does not contain any untrue statement of...

  • Page 64
    ... TO RULE 13a-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934 I, Alan M. Schnaid, certify that: 1) 2) I have reviewed this Amendment No. 1 to the annual report on Form 10-K of Starwood Hotels & Resorts Worldwide, Inc.; and Based on my knowledge, this report does not contain any untrue statement of...