Starwood 2015 Annual Report Download - page 31

Table of Contents
followed the Compensation Committee’s first regularly scheduled meeting that occurred after the release of our earnings for 2014. The timing of this meeting was
determined based on factors unrelated to the pricing of equity grants. The Compensation Committee (or its delegates), however, had discretion under unusual
circumstances to award grants at other times in the year, including as described above with respect to our newly hired named executive officers.
Compensation Committee Report
The Compensation Committee of the Board of Directors of Starwood Hotels & Resorts Worldwide, Inc. has reviewed and discussed the Compensation Discussion
and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, recommended to the Board of Directors that
the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.
Compensation Committee of the Board of Directors
Thomas E. Clarke, Chairman
Clayton C. Daley, Jr.
Lizanne Galbreath
Eric Hippeau
Thomas O. Ryder
Risk Assessment
In setting compensation, our Compensation Committee also considers the risks to our stockholders, and to us as a whole, 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 participated in the process. The review considered risk-
determining characteristics of the overall structure and individual components of our Company-wide compensation program, including our base salaries, incentive
plans and equity plans. A report of the findings was provided to the Compensation Committee for its review and consideration. Following this assessment, we
believe that we have instituted policies that do not create incentives for our executive officers or other employees to take risks that are reasonably likely to have a
material adverse effect on the Company. For example:
• Balance of Compensation: Across the Company, individual elements of our compensation program include base salaries, incentive compensation, and for
certain of our employees, equity-based awards. By providing a mix of different elements of compensation that reward both short-term and long-term
performance, our compensation programs as a whole provide a balanced approach to incentivizing and retaining employees, without placing an inappropriate
emphasis on any particular form of compensation.
• Objective Formula and Pre-established Performance Measures Dictate Annual Incentives: Under the Executive Plan, payment of annual incentives to our
covered named executive officers is subject to the satisfaction of specific Company-wide annual performance targets determined under an incentive formula
established by our Compensation Committee within the first 90 days of each fiscal year. Similarly, our employees other than the named executive officers
covered by the Executive Plan that are eligible to receive an annual incentive receive such incentive subject to the satisfaction of specific Company-wide annual
performance targets determined under an incentive formula established by our Compensation Committee. These performance targets are directly and specifically
tied to one or more of the following Company-wide business criteria: EBITDA, consolidated pre-tax earnings, net revenues, net earnings, operating income,
earnings before interest and taxes, cash flow measures, return on equity, return on net assets employed or EPS for the applicable fiscal year.
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