Western Union 2014 Annual Report Download - page 70

Compensation Discussion and Analysis PROXY STATEMENT
The Western Union Company – Proxy Statement | 52
NOTICE OF 2015 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
arrangements with departing executives and protects
our executives from termination for circumstances not
of their doing. The committee also believes the policy
promotes management independence and helps retain,
stabilize, and focus the executive officers in the event of
a change-in-control. In the event of a change-in-control,
the policy’s severance benefits are payable only upon a
“double trigger.” This means that severance benefits are
triggered only when an eligible executive is involuntarily
terminated (other than for cause, death, or disability),
or terminates his or her own employment voluntarily for
“good reason” (including a material reduction in title or
position, reduction in base salary or bonus opportunity
or an increase in the executive’s commute to his or
her current principal working location of more than
50 miles without consent) within 24 months after the
date of a change-in-control. Severance benefits under
the policy are conditioned upon the executive executing
an agreement and release which includes, among other
things, non-competition and non-solicitation restrictive
covenants and a release of claims against the Company.
During 2014, the Compensation Committee amended
the Executive Severance Policy to reduce the severance
multiple for determining severance benefits prior to
a change-in-control from 2 to 1.5 for participants
other than the Company’s Chief Executive Officer. This
amendment was approved after considering input from
the Compensation Consultant as well as market data. In
addition, the Executive Severance Policy prohibits excise
tax gross-up payments on change-in-control benefits for
those individuals who became executives of the Company
after April 2009. Mr. Ersek is the only Company employee
who remains eligible for excise tax gross-up payments.
Please see the “Executive Compensation-Potential
Payments Upon Termination or Change-in-Control”
section of this Proxy Statement for further information
regarding the Executive Severance Policy and the
treatment of awards upon qualifying termination events or
a change-in-control.
Retirement Savings Plans. Western Union executives on
United States payroll are eligible for retirement benefits
through a qualified defined contribution 401(k) plan,
the Incentive Savings Plan, and a non-qualified defined
contribution plan, the Supplemental Incentive Savings
Plan (“SISP.”) The SISP provides a vehicle for additional
deferred compensation with matching contributions from
the Company. We maintain the Incentive Savings Plan
and the SISP to encourage our employees to save some
percentage of their cash compensation for their eventual
retirement. Mr. Ersek participates in the qualified defined
contribution retirement plan made available to eligible
employees in Austria. The committee believes that these
types of savings plans are consistent with competitive pay
practices, and are an important element in attracting and
retaining talent in a competitive market. Please see the
2014 Nonqualified Deferred Compensation Table in the
“Executive Compensation” section of this Proxy Statement
for further information regarding Western Union’s
retirement savings plans.
Benefits and Perquisites. The Company’s global benefit
philosophy for employees, including executives, is to
provide a package of benefits consistent with local
practices and competitive within individual markets.
Each of our named executive officers participates in
the health and welfare benefit plans and fringe benefit
programs generally available to all other Western Union
employees in the individual market in which they are
located. In addition, in 2014 the Company provided the
benefits and perquisites as described in the 2014 Summary
Compensation Table in the “Executive Compensation”
section of this Proxy Statement.
The Company provided its other named executive officers
with competitive perquisites and other personal benefits
that are consistent with the Company’s philosophy of
attracting and retaining exemplary executive talent and,
in some cases, such as the annual physical examination,
the Company provides such personal benefits because the
Compensation Committee believes they are in the interests
of the Company and its stockholders. The committee
periodically reviews the levels of perquisites and other
personal benefits provided to named executive officers.
Employment Agreements. The Company generally
executes an offer of employment before an executive
joins the Company. This offer describes the basic terms
of the executive’s employment, including his or her start
date, starting salary, bonus target and long-term incentive