TripAdvisor 2013 Annual Report Download - page 164

In the summer of 2013, the Compensation Committee retained Compensia to review the existing
compensation peer group and to recommend possible changes. Compensia recommended certain changes to the
compensation peer group, including focusing on companies in the business to consumer internet content and
software industries. As a result, beginning in the summer of 2013 and with the granting of the equity award to
Mr. Kaufer in August 2013, the following companies constituted TripAdvisor’s compensation peer group:
Business to Consumer Internet Content
Expedia, Inc. Groupon, Inc.
Homeaway.com, Inc. IAC/InterActiveCorp
LinkedIn Corp. Netflix, Inc.
Pandora Media, Inc. priceline.com Incorporated
Shutterfly, Inc. VistaPrint N.V.
Software
Akamai Technologies, Inc. Ansys, Inc.
Citrix Systems, Inc. Concur Technologies, Inc.
FactSet Research Systems Inc. NetSuite Inc.
Nuance Communications, Inc. Red Hat Inc.
Verisign, Inc. Workday, Inc.
When available, management considers competitive market compensation paid by peer group companies but
does not attempt to maintain a certain target percentile within the compensation peer group or otherwise rely
solely on such data when making recommendations to the Compensation Committees regarding compensation
for our named executive officers. Management and the Compensation Committees strive to incorporate
flexibility into our executive compensation program and the assessment process to respond to and adjust for the
evolving business environment and the value delivered by our named executive officers.
Tax Matters
Section 162(m) of the Code generally permits a tax deduction to public corporations for compensation over
$1 million paid in any fiscal year to their chief executive officer and certain other highly compensated executive
officers only if the compensation qualifies as “performance-based compensation” for purposes of
Section 162(m). The Compensation Committees endeavor to structure the compensation of our executive officers
to qualify as “performance-based compensation” when it deems such qualification to be in the best interests of
TripAdvisor and its stockholders. Nonetheless, from time to time certain nondeductible compensation may be
paid and the Board of Directors and the Compensation Committees reserve the authority to award nondeductible
compensation to our executive officers in appropriate circumstances.
For purposes of enabling TripAdvisor to deduct the compensation paid to and recognized by our named
executive officers in accordance with Section 162(m) of the Code, the Compensation Committees sought to
design the annual bonuses awarded to our named executive officers in 2013 to qualify as “performance-based
compensation” as described under “Compensation Program Elements — Cash Bonuses” above.
Post-Employment Compensation
Change in Control
Under the 2011 Plan, our named executive officers are entitled to accelerated vesting of their outstanding
and unvested equity awards in the event of a change in control of TripAdvisor (i.e. a “single trigger” acceleration
provision), although the definition of a “change in control” in the 2011 Plan does not include the acquisition of
voting control by Liberty. When the 2011 Plan was adopted, the Compensation Committees believed that
accelerated vesting of equity awards in connection with change in control transactions would provide an
incentive for our named executive officers to continue to help execute successfully such a transaction from its
early stages until closing. Under the 2011 Plan, acceleration of equity awards for all other employees is subject to
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