Visa 2007 Annual Report Download - page 175

Table of Contents
The compensation peer group provides a relevant benchmark of compensation levels from external sources and allows us to assess the compensation
practices of our primary competitors for employees. In addition, the compensation peer group indicates the practices of leading organizations of comparable
scope and focus and provides a benchmark for establishing corporate performance expectations for incentive programs.
A significant percentage of total compensation will be allocated to incentive-based compensation as a result of the compensation philosophy mentioned
above. Although our compensation committee has not adopted any formal guidelines for allocating total compensation between either cash or non-cash,
annual or long-term incentive compensation, we intend to implement and maintain compensation plans that tie a substantial portion of our executives' overall
compensation to the achievement of our company goals.
We also use sign-on bonuses from time to time when recruiting executive officers. We may agree to pay a sign-on bonus to make our employment
offers competitive given that candidates who are currently employed at other companies frequently forfeit potential compensation by accepting employment
with us.
Generally, prior to the completion of the reorganization, we had not established standard compensation arrangements for our executive officers.
Existing compensation arrangements vary among our named executive officers due in part to the differences among the individual agreements between those
named executive officers who were historically employed by Visa U.S.A. versus Inovant. In the case of Messrs. Saunders, Pollitt and Morris, who have
recently been recruited into the organization, their compensation arrangements reflect our efforts to provide competitive compensation packages to attract a
highly-qualified Chief Executive Officer and executive officers into the organization with the requisite skills and experience to lead the organization during a
time of transition. Further, following our proposed initial public offering, we intend to adopt internally-consistent compensation programs and policies for our
named executive officers. Our compensation committee is considering new employment agreements for each of our named executive officers.
Executive Compensation Components
The principal components of compensation of our executive officers are:
• base salary;
• annual incentive programs;
• long-term incentive compensation;
• retirement and other benefits;
• perquisites and other personal benefits; and
• post-termination severance.
Our total compensation package is primarily weighted toward the following three components: base salary, annual incentive compensation and long-
term incentive compensation. In setting each executive's target total compensation, we benchmark his or her total compensation package as well as each
component of the compensation package against our compensation peer group. We do not use a formulaic approach in determining the appropriate
compensation mix. Rather, we determine each executive's actual base salary, annual incentive target and long-term incentive target by considering both the
external market data and internal equity amongst our executives based on their experience and performance and the nature and scope of their roles in our
organization. Our goal in setting the components of compensation is to provide a competitive total compensation package that balances market
competitiveness to attract and retain talented employees with internal equity and provides a sufficient portion of total compensation tied to individual and
corporate performance.
Fiscal 2007 was a transition year for Visa. In addition to leading and managing our payments network business, our senior executives were tasked with
various responsibilities relating to our reorganization. Because
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