Starwood 2015 Annual Report Download - page 45

Table of Contents
remains bound by the customary non-competition, non-solicitation, confidentiality and intellectual property provisions set forth in his employment agreement.
Director Compensation
We use a combination of cash and stock-based awards to attract and retain qualified candidates to serve on the Board of Directors. In setting director compensation,
we consider the significant amount of time that members of the Board spend in fulfilling their duties to us, as well as the skill level required by us of our directors.
The compensation structure in effect for 2015 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-Employee Director. If any
Non-Employee Director fails to satisfy this requirement, sales of shares by such Non-Employee Director will be subject to a 35% retention requirement. Any new
Non-Employee Director is given a period of three years to satisfy this requirement. All Non-Employee Directors met the share ownership guidelines in 2015. In
2015, Non-Employee Directors received compensation for their services as described below.
Annual Fees
In 2015, each Non-Employee Director received an annual fee in the amount of $90,000, payable in four equal installments of shares issued under our LTIP. The
number of shares issued was based on the fair market value of a share using the closing price of a share as of the last business day of the quarter preceding the
payment date.
A Non-Employee Director may elect to receive 100% of the annual fee in cash and to defer (at an annual interest rate of LIBOR plus 1.5% for deferred cash
amounts) any or all of such annual fee payable in cash. A Non-Employee Director is also permitted to elect to defer to a deferred unit account any or all of the
annual fee payable in shares. Deferred cash or stock amounts are payable in accordance with the Non-Employee Director’s advance election.
Non-Employee Directors serving as members of the Audit Committee received an additional annual fee payable in cash of $10,000 ($25,000 for the Chairman of
the Audit Committee). The Chairman of the Compensation Committee received an additional annual fee payable in cash of $20,000. The chairperson of each other
committee of the Board received an additional annual fee payable in cash of $15,000.
The Chairman of the Board received an additional fee of $150,000, payable quarterly in restricted stock units which generally vest in full upon the earlier of (1) the
third anniversary of the grant date and (2) the date such person ceases to be a director of the Company.
Attendance Fees
Non-Employee Directors do not receive fees for attendance at meetings.
Equity Grant
In 2015, each Non-Employee Director received an annual equity grant (made for prospective service, at the same time as the annual grant was made to Company
employees) under our LTIP with a value of about $135,000. The equity grant was delivered 100% in restricted stock units. The number of restricted stock units is
determined by dividing the award value by the fair market value of our stock on the date of grant (fair market value is calculated as the closing price of a share as of
the last business day prior to such date). The restricted stock units awarded pursuant to the annual grant generally vest in full upon the earlier of (1) the first
anniversary of the grant date and (2) the date such person ceases to be a director.
43