Starwood 2015 Annual Report Download - page 10

Table of Contents
In addition, on November 15, 2015, we announced the proposed sale of the Company in a series of transactions to Marriott International, Inc. (or Marriott), which
transactions we refer to collectively as the Merger. Pursuant to the merger agreement with Marriott, as amended on March 20, 2016, our stockholders will receive
0.800 shares of Marriott common stock and $21.00 in cash for each share of our common stock held, without interest. At a special meeting of our stockholders held
on April 8, 2016, our stockholders voted to approve the transactions contemplated by the merger agreement with Marriott.
2015 Pay Mix Analysis
An overwhelming portion of the target compensation for most of our named executive officers continued to be tied to either our financial or stock price
performance during 2015. As a result, total compensation for 2015 for the named 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, reflected our strong financial and operating results during 2015. For 2015, Mr. Aron’s compensation
mix was comprised of the following, such that a total of approximately 88% of his compensation was “at risk”: base salary – 12%; annual incentive – 23%; and
equity compensation – 65%. Mr. Mangas’ compensation mix (prior to assuming his current role on December 31, 2015) was comprised of the following, such that
a total of approximately 81% of his compensation was “at risk”: base salary – 19%; annual incentive – 19%; and long-term incentive – 61%. The average
compensation mix of the other named executive officers (other than Mr. van Paasschen and utilizing Mr. Schnaid’s pre-December 31, 2015 compensation) was
comprised of the following, such that an average of approximately 77% of their compensation was “at risk”: base salary – 23%; annual incentive – 22%; and long-
term incentive – 56%.
Consideration of 2015 Say-on-Pay Voting Results
Since our 2011 annual meeting of stockholders, we have 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 that annual meeting of stockholders. In 2015, our stockholders
overwhelmingly approved the proposal, with over 98% of the votes cast favoring the proposal. In fact, for each of the past five years, at least 96% of the votes cast
have been voted in favor of the proposal. The Compensation Committee considered the strong support for our say-on-pay proposal since 2011 as evidence of our
stockholders’ continuing support for the named executive officer compensation decisions and actions of the Compensation Committee. As a result, the
Compensation Committee did not make any material changes in the general structure of our named executive officer compensation program for 2015 or 2016 that
were prompted specifically by the results of our 2015 say-on-pay vote. However, as noted throughout this CD&A, the Compensation Committee did provide
Mr. Aron with a separate executive compensation package for his service to us during 2015 due to his interim status as our principal executive officer.
Design and Operation of Starwood’s 2015 Executive Compensation Program
Program Objectives and Other Considerations
Objectives. As a consumer lifestyle company with a branded hotel portfolio at its core, we operate in a competitive, dynamic and challenging business environment.
In step with this mission and environment, our compensation program for our named executive officers again had the following key objectives for 2015:
• Attract and Retain: We seek to attract and retain talented executives from within and outside the hospitality industry who understand the importance of
innovation, brand enhancement and consumer experience. We have been working to reinvent the hospitality industry, and one element of this endeavor has been
to bring in key talent from other industries. This was especially evident in 2014 with our hiring of Mr. Mangas and Ms. Poulter. As a result, our overall program
competitiveness must take other markets into account. To this end:
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