Tucows 2015 Annual Report Download - page 143

• life insurance and accidental death and dismemberment insurance;
• long term disability insurance;
• a registered retirement savings matching program;
• a healthcare spending account;
• a car allowance;
• an annual medical; and
• an employee assistance program.
Certain Corporate Governance Considerations
We currently do not require our executive officers to own a particular number of shares of our common stock.
The Corporate Governance, Nominating and Compensation Committee is satisfied that stock and option holdings
among our executive officers are sufficient at this time to provide motivation and to align their interests with those of
our stockholders. However, we prohibit all directors and employees from hedging their economic interest in the
Company securities that they hold.
Tax Considerations
We do not provide any tax gross-ups to our executive officers or directors.
In designing our compensation programs, the Corporate Governance, Nominating and Compensation
Committee considers the financial accounting and tax consequences to Tucows as well as the tax consequences to our
employees. In determining the aggregate number and mix of equity grants in any fiscal year, the Corporate Governance,
Nominating and Compensation Committee and management consider the size and share-based compensation expense of
the outstanding and new equity awards. Section 162(m) of the Code generally disallows a tax deduction to public
corporations for compensation greater than $1 million paid for any fiscal year to the corporation’s Chief Executive
Officer and the three other most highly compensated executive officers as of the end of any fiscal year, other than the
Chief Financial Officer. However, certain types of performance-based compensation are excluded from the $1 million
deduction limit if specific requirements are met.
The Committee considers the impact of Section 162(m) when designing our executive compensation program
and structured our Executive Bonus Plan, stock plans and performance share programs so that a number of awards may
be granted under these plans and programs in a manner that complies with the requirements imposed by Section 162(m).
Tax deductibility is not the primary factor used by the Committee in setting compensation, however, and corporate
objectives may not necessarily align with the requirements for full deductibility under Section 162(m). We believe it is
important to preserve flexibility in administering compensation programs as corporate objectives may not always be
consistent with the requirements for full deductibility. While our Corporate Governance, Nominating and Compensation
Committee has not adopted a formal policy regarding tax deductibility of compensation paid to our named executive
officers, our Compensation Committee may exercise discretion to pay nondeductible compensation if following the
requirements of Section 162(m) would not be in the interests of our shareholders.
Compensation Risk Assessment
The Corporate Governance, Nominating and Compensation Committee oversaw the performance of a risk
assessment of our executive compensation programs to ascertain any potential material risks that may be created by the
compensation program. Because performance-based incentives are used in our executive compensation program, it is
important to ensure that these incentives do not result in our NEOs taking unnecessary or excessive risks or any other
actions that may conflict with our long-term interests. The Corporate Governance, Nominating and Compensation
Committee considered the following attributes of our executive compensation program:
• the balance between short- and long-term incentives;
• use of qualitative as well as quantitative performance factors in determining compensation payouts, including
minimum and maximum performance thresholds, funding that is based on actual results measured against pre-
approved financial and operational goals and metrics that are clearly defined;
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