Western Union 2015 Annual Report Download - page 67

NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
2016 Proxy Statement | 49
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE GUIDELINE STATUS
Hikmet Ersek 6x salary Meets guideline
Rajesh K. Agrawal 2x salary Meets guideline
Odilon Almeida 2x salary Must hold 50% of
after-tax shares until
guideline is met
J. David Thompson 2x salary  Meets guideline
WHAT COUNTS TOWARD
THE GUIDELINE WHAT DOES NOT COUNT TOWARD THE GUIDELINE
✔ Western Union securities owned personally ✘ Unexercised stock options
✔ Shares held in any Western Union benefit plan ✘ PSUs
✔ After-tax value of time-based restricted stock and restricted
stock units
Prohibition Against Pledging and Hedging of the
Company’s Securities
The Company’s insider trading policy prohibits the
Company’s executive officers and directors from pledging the
Company’s securities or engaging in hedging or short-term
speculative trading of the Company’s securities, including,
without limitation, short sales or put or call options involving
the Company’s securities.
Clawback Policy
The Board of Directors adopted a clawback policy in 2009.
Under the policy, the Company may, in the Board’s discretion
and subject to applicable law, recover incentive compensation
paid to an executive officer of the Company (defined as an
individual subject to Section 16 of the Exchange Act, at the
time the incentive compensation was received by or paid to the
officer) if the compensation resulted from any financial result
or performance metric impacted by the executive officer’s
misconduct or fraud. The Board is monitoring this policy to
ensure that it is consistent with applicable laws, including any
requirements under the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the “Dodd-Frank Act”).
Tax Implications of Executive Compensation Program
Under Section 162(m) of the Internal Revenue Code, named
executive officer (other than the Chief Financial Officer)
compensation over $1 million for any year is generally
not deductible for United States income tax purposes.
Performance-based compensation is exempt from the
deduction limit, however, if certain requirements are met.
The Compensation Committee structures compensation
to take advantage of this exemption under Section 162(m)
to the extent practicable, while satisfying the Company’s
compensation policies and objectives. Because the
Compensation Committee also recognizes the need to
retain flexibility to make compensation decisions that may
not meet the standards of Section 162(m) when necessary
to enable the Company to continue to attract, retain, and
motivate highly-qualified executives, it reserves the authority
to approve potentially non-deductible compensation in
appropriate circumstances.
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
Hikmet Ersek
President and Chief Executive Officer
Mr. Ersek’s 2015 compensation was weighted significantly
toward variable and performance-based incentive pay over
fixed pay, and long-term, equity-based pay over annual
cash compensation, because the Compensation Committee
desired to tie a significant level of Mr. Ersek’s compensation
to the performance of the Company. The percentage of
compensation delivered in the form of performance-based
compensation is higher for Mr. Ersek than compared to the
other named executive officers because the Compensation
Committee believes that the Chief Executive Officer’s
leadership is one of the key drivers of the Company’s success,
and that a greater percentage of the Chief Executive Officer’s
total compensation should be variable as a reflection of the
Company’s level of performance. Market data provided by the
Compensation Consultant supported this practice as well.
Accordingly, at target-level performance for 2015, Mr. Ersek’s
annual compensation was weighted 12% base salary, 17%
annual incentive award, and 71% long-term incentive award.
Approximately 88% of Mr. Ersek’s 2015 targeted total annual
compensation varies based on the Company’s performance.