Western Union 2014 Annual Report Download - page 67

49 | The Western Union Company – Proxy Statement
NOTICE OF 2015 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
Compensation Discussion and Analysis PROXY STATEMENT
Incentive Plan design included a payout modifier with
respect to the portion of the bonus opportunity allocated
to individual and business unit performance objectives.
Under the plan design, the Compensation Committee
retained the discretion to modify the deemed overall
attainment of the individual and business unit performance
objectives based on a qualitative assessment performed by
the Compliance Committee of the Board of employee and
Company execution on compliance initiatives. For 2014,
the Compensation Committee, based on the Compliance
Committee’s qualitative assessment, utilized the payout
modifier to increase the 2014 Annual Incentive Plan
payouts by approximately 6% to 7% of the target award
opportunity for each named executive officer other than
the Chief Executive Officer in recognition of enhancements
made to the Company’s global compliance programs.
The committee believes the performance objectives
established for each of the named executive officers
are indicators of the executive’s success in fulfilling the
executive’s responsibilities to the Company and support
the Company’s strategic operating plan. The committee
also believes that including compliance as both a
performance objective and a payout modifier reinforces
compliance as a priority throughout the organization. The
performance levels of the individual and business unit
objectives were designed to be achievable, but required
strong and consistent performance by the executive. Please
see “-Compensation of Our Named Executive Officers” for
a discussion of the annual incentive payouts received by
each named executive officer.
Long-Term Incentive Compensation
The Long-Term Incentive Plan allows the Compensation
Committee to award various forms of long-term incentive
grants, including stock options, restricted stock units,
performance-based equity and performance-based cash
awards. The Compensation Committee has sole discretion
in selecting participants for long-term incentive grants
and the Compensation Committee approves all equity
grants made to our senior executives, with the equity
grants made to the Chief Executive Officer ratified by the
independent directors of the Board. When making regular
annual equity grants, the Compensation Committee’s
practice is to approve them during the first quarter of each
year as part of the annual compensation review. Among
other factors, the Compensation Committee considers
dilution of the Company’s outstanding shares when
making such grants.
2014 Enhancements to Long-Term Incentive Awards. As part
of its ongoing review of the executive compensation program
during 2014, and based on input from the Compensation
Consultant, the Compensation Committee approved certain
changes to the Company’s long-term incentive program in
order to further enhance the Company’s pay-for-performance
philosophy and further align the interests of executives with
those of our stockholders. Accordingly, in February 2014,
the Compensation Committee approved the following
modifications to the Company’s long-term incentive program:
• Created Standalone TSR PSUs: We replaced the TSR
modifier from our 2013 Long-Term Incentive Plan design
with a standalone TSR PSU award in order to enhance
focus on stockholder returns.
• Increased Performance Period for Performance-
Based Restricted Stock Units: We increased the
performance period of our performance-based
restricted stock units from two years to three 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.
• Established Goals Exceeding Performance During
Prior Three Years: The financial performance target
objectives for the 2014 Financial PSUs were set at
constant currency growth rates that are higher than
the Company’s average annual constant currency
results achieved over 2011 through 2013. Further, the
Company’s relative TSR performance rank versus the
S&P 500 Index over a 2014-2016 performance period
that is required to earn a target payout under the terms
of the 2014 TSR PSUs is higher than the Company’s
annual relative TSR performance versus the S&P 500
Index in each of 2011, 2012, and 2013.
2014 Annual Long-Term Incentive Awards. The
Compensation Committee’s objectives for the 2014
long-term incentive awards were to:
• Align the interests of our executives with the interests
of our stockholders by focusing on objectives that
result in stock price appreciation through the use of
stock options;