Western Union 2013 Annual Report Download - page 49

31 | The Western Union Company – Proxy Statement
NOTICE OF 2014 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
Compensation Discussion and Analysis PROXY STATEMENT
Recent Compensation Actions
For 2013, many of the compensation decisions were
designed to further align the program with the Company’s
mid- and long-term operating plans, increase participant
accountability, and drive motivation and retention beyond
2013. These decisions included:
• No Executive Base Salary Increases for 2013 or
2014: There was no change in our named executive
officers’ base salary levels for 2013 or 2014 from levels
effective March 2012.
• No 2012 Chief Executive Officer Bonus: Based
on 2012 Company performance, our Chief Executive
Officer did not receive a bonus in 2013.
• 2013 Annual Incentive Includes Restricted
Stock Unit Component: In 2013, we modified the
Company’s Annual Incentive Plan design to include
individual and/or business unit performance objectives,
and a restricted stock unit award to be granted
based on the achievement of strategic objectives
and a threshold operating income goal to further
focus participants on the long-term performance of
the Company.
• 2013 Long-Term Incentive Includes TSR Modifier:
We modified the Long-Term Incentive Plan design to
include 2013 and 2014 financial performance metrics,
while still maintaining a longer-term perspective in the
program with a TSR payout modifier.
• Realizable Compensation Lower than Reported
Compensation: Our named executive officers’
realizable compensation has been lower than
the compensation disclosed in our Summary
Compensation Table for fiscal years 2011 to 2013.
See the “2013 Realizable Compensation Table” on
page 42.
Chief Executive Officer Compensation
For 2013 performance, Mr. Ersek received a cash payout
under the 2013 Annual Incentive Plan of 84% of target,
as compared to no payout for 2012 performance. Because
he is the leader of the Company, the Compensation
Committee based Mr. Ersek’s cash opportunity under
the Annual Incentive Plan entirely on the achievement of
corporate financial goals, as measured by total revenue
and operating income. In 2013, the Compensation
Committee adjusted the performance targets associated
with these performance measures from the levels set
in 2012 to reflect that many of the strategic actions
implemented by the Company beginning in late 2012 were
designed to position the Company for future growth,
and were expected to have a negative impact on 2013
financial performance. The Company achieved revenue
and operating income at 99.5% and 10 0.1% of target,
respectively, for an overall cash payout achievement level
of 84%.
Also, under the 2013 Annual Incentive Plan, Mr. Ersek had
an opportunity to receive a restricted stock unit award
for various levels of achievement of strategic performance
objectives. Achievement of the Company’s internal
operating plan for these strategic objectives would result
in a restricted stock unit payout equal to 25% of target
and maximum achievement would result in a payout
equal to 75% of target. Mr. Ersek substantially met key
objectives in support of the Company’s 2013 strategic
objectives, as demonstrated by consumer-to-consumer
transaction growth, revenue growth in electronic
channels, and growth in business-to-business revenue
described under ”-Executive Summary – Business
Overview” above, and under “-The Western Union
Executive Compensation Program – Annual Incentive
Compensation,” below. Accordingly, the committee
certified a restricted stock unit award payout under the
2013 Annual Incentive Plan of 17% of target, based on the
Company’s achievement of its strategic performance goals
(versus a payout of 25% of target that would have been
paid had the Company achieved its internal plan for its
strategic performance goals).