Western Union 2014 Annual Report Download - page 66

Compensation Discussion and Analysis PROXY STATEMENT
The Western Union Company – Proxy Statement | 48
NOTICE OF 2015 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
by 7.0% and 11.0%, respectively, as compared to 2013.
Within the grid, a higher rate of increase for one metric
could counterbalance a lower rate of increase for the
other metric. For 2014, the grid range for the revenue and
operating income performance goals as well as the 2014
achievement are as follows:
Target Range Results Achievement (%)
Total Revenue $5,597M-$5,928M $5,765M103%
Operating Income $1,118M-$1,229M $1,181M111%
Overall Achievement 107%
When the grid was established and consistent with
prior years, the committee determined that the effect of
currency fluctuations on revenue and operating income
performance should be excluded from the payout
calculation, as committee members believed compensation
should not be based on factors outside of the control
of our executives. In addition, pursuant to the Annual
Incentive Plan and subject to compliance with Section
162(m) of the Internal Revenue Code, the Compensation
Committee retained discretion to adjust the performance
results against the performance objectives for major
nonrecurring and non-operating expense and income
items based on the facts and circumstances involved. The
Compensation Committee did not exercise this discretion
to adjust such performance results for the 2014 Annual
Incentive Plan.
Strategic Performance Objectives. Participants in the 2014
Annual Incentive Plan had 20% of their award opportunity
tied to the achievement of strategic performance
objectives based upon the Company’s strategic operating
plan, with a focus on the Company’s growth imperatives.
Performance levels of the objectives were designed to be
achievable, but required the coordinated, cross-functional
focus and effort of the executives. Based on the
achievement of the strategic performance objectives,
the committee certified a payout equal to 11% of each
named executive officer’s target allocated to the strategic
performance objectives. The strategic performance
objectives, their respective weightings as well as the
performance assessment for the 2014 Annual Incentive
Plan awards are as follows:
2014 Annual Incentive Plan Strategic Performance Goals 2014 Actual Performance
Currency adjusted growth in revenue originating from digital
(weighting 6%)
Below the threshold performance goal
Currency adjusted growth in consumer to consumer principal
via wu.com (weighting 4%)
Between threshold and target
performance goals
Currency adjusted revenue growth in Western Union Business Solutions
(weighting 6%)
Below the threshold performance goal
Currency adjusted EBITDA growth in Western Union Business Solutions
(weighting 4%)
Below the threshold performance goal
Performance Level Achievement 11%
Individual and Business Unit Performance Objectives. As
noted in the table on the previous page, other than for
Mr. Ersek, 30% of the 2014 annual incentive awards was
subject to the achievement of individual and/or business
unit performance objectives. Weighting for each individual
and business unit performance objective ranged from 10%
to 40% of the bonus opportunity allocated to individual
and/or business unit performance. These objectives varied
by named executive officer and included objectives relating
to operating cash flow, expense management, business
unit revenue growth, business unit profit growth, business
unit profit margin, execution of various information
technology projects, customer satisfaction with customer
service center support, compliance costs, management
of compliance with the settlement agreement by and
between Western Union Financial Services, Inc. and the
State of Arizona, dated February 11, 2010, as amended,
and global consumer fraud. To emphasize the importance
of compliance and employee engagement throughout
the organization, the individual performance objectives
also included objectives relating to compliance initiatives
and employee engagement. In addition, the 2014 Annual