Western Union 2015 Annual Report Download - page 51

NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
2016 Proxy Statement | 33
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE COMPENSATION FRAMEWORK
The Company’s executive compensation framework includes the following, each of which the committee believes reinforces
our executive compensation philosophy and objectives:
What We Do:
✓ Pay-for-performance. A significant percentage of targeted annual compensation is delivered in the form of variable
compensation that is connected to actual performance. For 2015, variable compensation comprised approximately 88% of the
targeted annual compensation for the Chief Executive Officer and, on average, 76% of the targeted annual compensation for
the other named executive officers.
✓ Linkage between performance measures and strategic objectives. Performance measures for incentive compensation
are linked to both strategic and operating objectives designed to create long-term stockholder value and to hold executives
accountable for their individual performance and the performance of the Company.
✓ Emphasis on future pay opportunity vs. current pay. In 2015, all of the long-term incentive awards delivered to our named
executive officers were in the form of equity-based compensation. For 2015, long-term equity compensation comprised
approximately 71% of the targeted annual compensation for the Chief Executive Officer and, on average, 54% of the targeted
annual compensation for the other named executive officers.
✓ Mix of performance metrics. The Company utilizes a mix of performance metrics that emphasize both performance goals,
which provide the primary links between incentive compensation and the Company’s strategic operating plan and financial
results, and relative performance goals, which measure Company performance in comparison to the S&P 500 Index.
✓ Stockholder engagement. As part of the Company’s stockholder outreach program, the Compensation Committee chair
and members of management seek to engage with stockholders regularly to discuss and understand their perceptions or
concerns regarding our executive compensation program.
✓ Outside compensation consultant. The Compensation Committee retains its own compensation consultant to review the
Company’s executive compensation program and practices.
✓ “Double trigger” in the event of a change-in-control. In the event of a change-in-control, severance benefits are payable only
upon a “double trigger.”
✓ Maximum payout caps for annual cash incentive compensation and PSUs.
✓ “Clawback” Policy. The Company may recover incentive compensation paid to an executive officer that was calculated based
upon any financial result or performance metric impacted by fraud or misconduct of the executive officer.
✓ Robust stock ownership guidelines. Our Chief Executive Officer is required to hold stock equal to a multiple of six times his
base salary, and each of our other named executive officers is required to hold stock equal to a multiple of two times his or her
base salary. Fifty percent of after-tax shares received as equity compensation must be retained until an executive meets the
stock ownership guideline.
What We Don’t Do:
✘ No change-in-control tax gross ups. We do not provide change-in-control tax gross ups to individuals promoted or hired
after April 2009. Mr. Ersek is the only Company employee who remains eligible for excise tax gross-up payments based on
Compensation Committee action in 2009.
✘ No repricing or buyout of underwater stock options. None of our equity plans permit the repricing or buyout of underwater
stock options or stock appreciation rights without stockholder approval, except in connection with certain corporate
transactions involving the Company.
✘ Prohibition against pledging and hedging of Company securities by senior executives and directors.
✘ No dividends or dividend equivalents are accrued or paid on PSUs or time-based restricted stock unit awards.