Western Union 2014 Annual Report Download - page 50

Compensation Discussion and Analysis PROXY STATEMENT
The Western Union Company – Proxy Statement | 32
NOTICE OF 2015 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
Compensation Discussion and Analysis
Executive Summary
Business Overview
The Western Union Company provides people and
businesses with fast, reliable, and convenient ways to send
money and make payments around the world. Western
Union offers its services in more than 200 countries
and territories. Our business is complex: our regulatory
environment is disparate and developing; our consumers
are different from those addressed by traditional financial
services firms; and our agent and client relationships are
numerous and varied. Managing these complexities is at
the center of Western Union’s success, and our leadership
must be capable of supporting our Company’s goals amid
this complexity.
Similar to 2013, the Company’s key strategic priorities for
2014 remained focused on strengthening our consumer
money transfer business, with a continued emphasis on
digital expansion; driving accelerated growth in Western
Union Business Solutions; and generating and deploying
strong cash flow for our stockholders. The performance
goals and objectives under our annual incentive and
long-term incentive programs were designed to support
these strategies.
Selected 2014 results are as follows:
• Revenueof$5.6 billion, up 1% from 2013;
• Operatingincomeof$1.1 billion, up 3% from 2013;
• Operatingincomemarginof20.3%, compared to
20.0% in 2013;
• Cashflowfromoperationsof$1.0 billion, down 4%
from 2013; and
• TSR of 6.9% compared to 30.6% in 2013.
Please see our 2014 Annual Report on Form 10-K for more
information regarding our performance.
Recent Compensation Actions
For 2014, many of the compensation decisions were
designed to further align the Company’s executive
compensation program with the Company’s future growth
and strategic operating plans and the interests of our
executives with those of our stockholders. Specifically,
the Compensation Committee (the “Compensation
Committee” or “committee”) approved several
modifications to the compensation program to further
align the executive compensation program with evolving
investor preferences, executive compensation practices
and market trends.
These decisions included:
• No Executive Base Salary Increases for 2013 or
2014: Other than with respect to executive promotions,
there were no changes in our named executive officers’
base salary levels for 2013 or 2014 from the levels
effective March 2012.
• Created Standalone TSR Performance-Based
Restricted Stock Units: We replaced the TSR modifier
from our 2013 long-term incentive design under the
Long-Term Incentive Plan with a standalone TSR PSU
in order to enhance focus on stockholder returns.
These TSR PSUs require the Company to achieve 60th
percentile relative TSR performance versus the S&P 500
Index over a three-year performance period in order
to earn target payout, with 30th percentile relative TSR
performance resulting in threshold payout and 90th
percentile relative TSR resulting in maximum payout.
• Increased Performance Period for Performance-
Based Restricted Stock Units: We increased the
performance period of our performance-based
restricted stock units so that they will be subject to
a three-year total performance period, versus the
two-year performance period used in prior years.
• Diversified Long-Term Incentive Plan Mix and
Increased Weighting of At-Risk Awards: We
increased the percentage of our annual equity
grants that have vesting provisions that are strictly
performance-based and at-risk. For 2014, the annual