Starwood 2015 Annual Report Download - page 15

Table of Contents
2015 Incentive Compensation
Incentive compensation generally consists of annual cash incentive awards under either our Executive Plan or our Annual Incentive Plan and long-term incentive
compensation in the form of equity awards under our LTIP. For 2015, incentive compensation for our continuing named executive officers accounted for an
average of approximately 77% of total compensation at target (81% for Mr. Mangas), with annual cash incentive compensation and long-term incentive
compensation accounting for 22% and 56%, respectively (19% and 61% for Mr. Mangas, respectively). Due to Mr. van Paasschen’s departure in early 2015, he did
not participate in our 2015 incentive compensation programs, but instead received as part of his severance benefits payment equal in value to one-sixth of what the
Compensation Committee determined he would have earned under 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 performance objectives were met.
We believe that the chosen allocation between base salary and incentive compensation is appropriate and beneficial because it:
• promotes our competitive position by allowing us generally to provide named executive officers with total compensation that reflects performance;
• targets and attracts highly motivated and talented executives within and outside the hospitality industry;
• aligns senior management’s interests with those of our stockholders;
• promotes achievement of business and individual performance objectives; and
• provides long-term incentives for named executive officers to remain in our employment.
2015 Annual Incentive Compensation Under Executive Plan. Annual cash incentive awards are a key part of our executive compensation program. For 2015,
each continuing named executive officer (other than Mr. Schnaid) and Mr. Aron had an opportunity to receive a cash incentive award under the stockholder-
approved Executive Plan. Mr. Schnaid received his cash incentive award opportunity under our non-stockholder-approved Annual Incentive Plan. Due to his
departure from the Company in February 2015, Mr. van Paasschen received in severance a cash amount equal to one-sixth of the award the Compensation
Committee determined he would have earned under the Annual Incentive Plan for 2015 were he to remain employed for the entirety of 2015, based on actual
results for the year, as further described below.
Mr. Schnaid did not receive his 2015 cash incentive award opportunity under the Executive Plan because at the time his award opportunity was established it was
not anticipated that he would be eligible to participate in the Executive Plan. Mr. Schnaid’s award was not structured to mirror the Executive Plan, and the
description immediately following does not describe the process used to determine Mr. Schnaid’s 2015 annual incentive compensation award. For more
information about Mr. Schnaid’s 2015 annual incentive compensation award, refer to the discussion below.
Viewed on a combined basis, once minimum performance is attained as applicable under the Executive Plan, the annual incentive payments attributable to both
Company financial and individual performance can range from 0% to about 200% of target for continuing named executive officers (other than Mr. Schnaid). See
additional detail regarding targets in the table below in this report and in the 2015 Grants of Plan-Based Awards Table below in this report.
ExecutivePlanMinimumThreshold. Under the Executive Plan, for 2015, the Compensation Committee established in advance a threshold level of adjusted
EBITDA that we had to achieve in order for any incentive to
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