TripAdvisor 2012 Annual Report Download - page 157

Role of Executive Officers
TripAdvisor management participates in reviewing and refining our executive compensation program.
Mr. Kaufer, TripAdvisor’s President and Chief Executive Officer, annually reviews the performance of the
Company and each named executive officer with the Chairperson and the Compensation Committees and makes
recommendations with respect to the appropriate base salary, annual cash bonus and grants of long-term equity
incentive awards for each named executive officer, other than in connection with compensation for himself.
Based in part on these recommendations and other considerations discussed below, the Compensation
Committees review and approve the annual compensation package of each named executive officer.
The Role of Shareholder Say-on-Pay Votes
TripAdvisor provides its stockholders with the opportunity to cast an advisory vote to approve the
compensation of the named executive officers. In evaluating our 2012 executive compensation program, the
Compensation Committees considered the result of the stockholder advisory vote on our executive compensation
(the “say-on-pay vote”) held at our Annual Meeting of Stockholders on June 26, 2012, which was approved by
over 99% of the votes cast. As a result, the Compensation Committees did not make any significant changes to
our executive compensation program for 2012. The Compensation Committees will continue to consider the
outcome of the say-on-pay vote when making future compensation decisions for the named executive officers.
We will hold a say-on-pay vote every three years until the next vote on the frequency of such stockholder
advisory votes, which will occur no later than our 2018 Annual Meeting of Stockholders.
Compensation Program Elements
General
The primary elements of the executive compensation program are base salary, annual cash bonus and equity
compensation. Generally, the Compensation Committees review these elements in the first quarter of each year
in light of TripAdvisor and individual performance, recommendations from management and other relevant
information, including prior compensation history and outstanding long-term compensation arrangements.
Management and the Compensation Committees believe that there are multiple, dynamic factors that contribute
to success at an individual and business level. Management and the Compensation Committees have therefore
avoided adopting strict formulas and have relied primarily on a discretionary approach that allows the
Compensation Committees to set executive compensation levels on a case-by-case basis, taking into account all
relevant factors.
Following recommendations from management, the Compensation Committees may also adjust
compensation for specific individuals at other times during the year when there are significant changes in
responsibilities or under other circumstances that the Compensation Committees consider appropriate.
Base Salary
Base salary represents the fixed portion of a named executive officer’s compensation and is intended to
provide compensation for expected day-to-day performance. An executive officer’s base salary is initially
determined upon hire or promotion based on the executive officer’s responsibilities, prior experience, individual
compensation history and salary levels of other executives within TripAdvisor and similarly situated executives
at comparable companies. Base salary is typically reviewed annually, at which time management makes
recommendations to the Compensation Committees based on consideration of a variety of factors, including:
• the executive’s total compensation relative to other executives in similarly situated positions,
• individual performance of the executive,
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