Western Union 2013 Annual Report Download - page 89

71 | The Western Union Company – Proxy Statement
NOTICE OF 2014 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
Executive Compensation PROXY STATEMENT
Risk Management and Compensation
Appropriately incentivizing behaviors which foster the
best interests of the Company and its stockholders is
an essential part of the compensation-setting process.
The Company believes that risk-taking is necessary for
continued innovation and growth, but that risks should
be encouraged within parameters that are appropriate for
the long-term health and sustainability of the business.
As part of its compensation setting process, the Company
evaluates the merits of its compensation programs through
a comprehensive review of its compensation policies
and programs to determine whether they encourage
unnecessary or inappropriate risk-taking by the Company’s
executives and employees below the executive level. Based
on this review, the Company has concluded that the risks
arising from its compensation programs are not reasonably
likely to have a material adverse effect on the Company.
Management and the Compensation Consultant review
the Company’s compensation programs, including the
broad-based employee programs and the programs tied
to the performance of individual business units. The team
maps the level of “enterprise” risk for each business
area, as established through the Company’s enterprise
risk management oversight process, with the level of
compensation risk for the associated incentive programs.
In developing the risk assessment, the team reviews the
compensation programs within each business area for:
• Themixoffixedversusvariablepay;
• Theperformancemetricstowhichpayistied;
• Whetherthepayopportunityiscapped;
• Thetimingofpayout;
• Whether“clawback”adjustmentsarepermitted;
• Theuseofequityawards;and
• Whetherstockownershipguidelinesapply.
Annual incentive awards and long-term incentive awards
granted to executives are tied primarily to corporate
performance goals, including revenue, operating income
growth, and strategic performance objectives. These
metrics encourage performance that supports the business
as a whole. The executive annual incentive awards include
a maximum payout opportunity equal to 200% of target.
Our executives are also expected to meet share ownership
guidelines in order to align the executives’ interests
with those of our stockholders. Also, the Company’s
clawback policy permits the Company to recover
incentive compensation paid to an executive officer if
the compensation resulted from any financial result or
metric impacted by the executive officer’s misconduct or
fraud. This policy helps to discourage inappropriate risks,
as executives will be held accountable for misconduct
which is harmful to the Company’s financial and
reputational health.