Western Union 2014 Annual Report Download - page 57

Compensation Discussion and Analysis PROXY STATEMENT
39 | The Western Union Company – Proxy Statement
NOTICE OF 2015 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
• Reviewsmarketdataandadvisesthecommittee
regarding the compensation of the Company’s
executive officers;
• Reviewsandadvisesthecommitteeregardingdirector
compensation; and
• PerformsanannualriskassessmentoftheCompany’s
compensation programs, as described in the “Executive
Compensation-Risk Management and Compensation”
section of this Proxy Statement.
The Compensation Consultant does not provide any other
services to the Company. The Compensation Committee
has assessed the independence of the Compensation
Consultant pursuant to the NYSE rules and the Company
concluded that the Compensation Consultant’s work for
the Compensation Committee did not raise any conflict
of interest.
During 2014, the Company also retained the services of
Towers Watson to assist the Company in evaluating the
Company’s annual and long-term incentive programs.
The Compensation Committee evaluated the findings of
Towers Watson in its review of the 2014 incentive program
design. The Compensation Committee has assessed the
independence of Towers Watson pursuant to the NYSE
rules and the Company concluded that Towers Watson’s
work did not raise any conflict of interest.
Setting 2014 Compensation
In late 2013, the Compensation Committee, working with
the Compensation Consultant and the Chief Executive
Officer, engaged in a detailed review of the Company’s
executive compensation programs to evaluate whether the
design and levels of each compensation element were:
• AppropriatetosupporttheCompany’sstrategic
performance objectives;
• Consistentwiththephilosophyandobjectivesdescribed
under “—Our Executive Compensation Philosophy and
Objectives” above; and
• Reasonablewhencomparedtomarketpaypractices
(see “—Market Comparison” below).
Specifically, the Compensation 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 modifications included:
• ReplacingtheTSRmodifierincludedinour2013Long-
Term Incentive Plan design with a standalone TSR
PSU award;
• Increasingtheperformanceperiodforperformance-
based restricted stock units so that they are subject to a
three-year total performance period, versus the two-
year performance period used in prior years;
• Increasingthepercentageofourannualequity
grants that have vesting provisions that are strictly
performance-based and at-risk;
• Reducingthemaximumpayoutopportunityunderthe
Annual Incentive Plan from 200% of target to 150% of
target; and
• Establishingperformancegoalsthatexceed
performance during the prior three years.
In early 2014, Mr. Ersek presented to the Compensation
Committee his evaluation of each of the Executive
Vice Presidents and the level of his or her salary, annual
bonus targets under the Annual Incentive Plan, and
long-term incentive award targets under the Long-Term
Incentive Plan. Mr. Ersek based his assessments on each
executive’s performance and relative contributions to the
Company’s success, the performance of the executive’s
respective business unit or functional area, employee
retention considerations, compensation history and internal
equity. Mr. Ersek also reviewed with the committee tally
sheets that presented comprehensive historical and current
compensation data for each of the Company’s executive
officers. Please see “—Use of Tally Sheets” below for a
description of this tool. The Compensation Consultant
participated in the committee meetings to provide peer
group and market data regarding executive compensation.
Please see “—Market Comparison” for a discussion of the
use of peer group and market data.