Western Union 2015 Annual Report Download - page 63

NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
2016 Proxy Statement | 45
COMPENSATION DISCUSSION AND ANALYSIS
The following table summarizes the annual incentive payouts received by each named executive officer. For additional
discussion, please see “–Compensation of Our Named Executive Officers” below.
EXECUTIVE
TARGET
BONUS
AS A %
OF BASE
SALARY
TARGET
AWARD
OPPORTUNITY
($000)
CORPORATE
OBJECTIVES
PAYOUT
AT 117% OF
TARGET
($000)
STRATEGIC
OBJECTIVES
PAYOUT
AT 121% OF
TARGET
($000)
INDIVIDUAL
OBJECTIVES
ACHIEVEMENT AS A
% OF TARGET AND
CORRESPONDING
PAYOUT AMOUNT
($000)
FINAL
BONUS
($000)
FINAL
BONUS
AS A % OF
TARGET
Hikmet Ersek 150% $1,500.0 $1,404.0 $363.0 N/A $1,767.0 118%
Rajesh K. Agrawal 90% $509.9 $298.3 $123.4 119% achievement =
$182.0 payout
$603.7 118%
Odilon Almeida 90% $550.8 $322.2 $133.3 119% achievement =
$196.6 payout
$652.1 118%
J. David Thompson 90% $486.0 $284.3 $117.6 84% achievement =
$122.5 payout
$524.4 108%
Diane Scott 85% $440.3 $257.6 $106.5 106% achievement =
$140.0 payout
$504.1 115%
Long-Term Incentive Compensation
The Company’s long-term incentive program 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.
Similar to the Annual Incentive Plan and subject to
Section 162(m) of the Internal Revenue Code, when the
financial performance objectives were established for
the annual long-term incentive awards described below,
the committee determined that the effect of currency
fluctuations, acquisitions and divestitures, restructuring,
and other significant charges not included in the Company’s
internal financial plans should be excluded from the payout
calculations. Accordingly, the Paymap Charge was excluded
from the calculations for the 2014 and 2015 long-term
incentive plan awards.
2015 Annual Long-Term Incentive Awards. The
Compensation Committee’s objectives for the 2015 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;
• Increase cross-functional executive focus in the coming
years on key performance metrics through Financial
PSUs;
• Amplify executive focus on stockholder returns through
TSR PSUs; and
• Retain the services of executives through multi-year
vesting provisions.
In early 2015, the Compensation Committee granted the
Chief Executive Officer and the Executive Vice Presidents
long-term incentive awards under the Long-Term Incentive
Plan. For 2015, no changes were made to any named
executive officer's long-term incentive award target from the
previous year. The 2015 awards consisted of 80% PSUs (60%
Financial PSUs, incorporating both revenue and operating
income growth, and 20% TSR PSUs) and 20% stock options.
The committee believed that the mix of Financial PSUs, TSR
PSUs and stock options was appropriate because these
forms of awards combined represented a balanced reflection
of stockholder returns and financial performance. The PSUs
are described in greater detail below. The stock options
vest in 25% annual increments over four years and have a
10-year term. In addition, as discussed in “—Compensation
of Our Named Executive Officers” below, Mr. Thompson
received a time-based restricted stock unit grant in 2015 for
retention purposes.
Financial PSUs. The 2015 Financial PSU awards will vest
if and only to the extent that specific performance goals
for revenue and operating income are met during the
performance period. To motivate constant improvement
over prior year results, the performance objectives under the
2015 Financial PSUs design are based on targeted constant
currency compound annual growth rates (“CAGR”) for revenue
and operating income. At the beginning of the performance
period, the committee established revenue and operating
income CAGR goals for each year of the performance period,
with each year weighted equally in the determination of the