Western Union 2015 Annual Report Download - page 73

NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
2016 Proxy Statement | 55
EXECUTIVE COMPENSATION
NARRATIVE TO SUMMARY COMPENSATION TABLE AND
GRANTS OF PLAN-BASED AWARDS TABLE
EMPLOYMENT ARRANGEMENTS
As noted in the Compensation Discussion and Analysis, the
Company generally executes a written offer of employment
prior to the time an executive joins the Company which
describes the basic terms of the executive’s employment,
including his or her start date, starting salary, bonus target,
and long-term incentive award target. The terms of the
executive’s employment are based thereafter on sustained
good performance rather than contractual terms, and the
Company’s policies, such as the Executive Severance Policy,
will determine the benefits to be received by senior executives,
including our named executive officers, upon termination of
employment from Western Union. Please see the “—Potential
Payments Upon Termination or Change-in-Control” section
for a description of the policy.
As noted in the Compensation Discussion and Analysis,
under certain circumstances, the Compensation Committee
recognizes that special arrangements with respect to an
executive’s employment may be necessary or desirable.
Accordingly, during 2015, Mr. Ersek was party to an
employment agreement pursuant to which Mr. Ersek agreed
to serve as the Company’s President and Chief Executive
Officer. The terms of Mr. Ersek’s employment agreement
provide for (i) eligibility to participate in the Annual Incentive
Plan and Long-Term Incentive Plan and (ii) eligibility to
participate in retirement, health, and welfare benefit programs
on the same basis as similarly situated employees in Austria.
Mr. Ersek’s employment agreement also includes non-
competition, non-solicitation, and confidentiality provisions.
AWARDS
In 2015, the Compensation Committee granted the Chief
Executive Officer and the Executive Vice Presidents long-
term incentive awards under the Long-Term Incentive Plan,
consisting of 20% stock option awards, 60% as Financial PSUs
(incorporating both revenue and operating income growth)
and 20% as TSR PSUs. During 2015, the Compensation
Committee also granted a time-based restricted stock unit
award to Mr. Thompson for retention purposes. Please see
the “Compensation Discussion and Analysis” section of this
Proxy Statement for further information regarding the 2015
long-term incentive awards and Mr. Thompson’s retention
grant, including the performance metrics applicable to the
2015 performance-based restricted stock units.
At its February 2015 meeting, the Compensation Committee
established performance objectives to be considered under
the Annual Incentive Plan for the 2015 plan year. As discussed
in the “Compensation Discussion and Analysis” section of
this Proxy Statement, participants are eligible to receive a
cash payout ranging from 0% to 150% of target based on the
achievement of corporate financial, strategic and individual/
business unit goals, except for Mr. Ersek whose cash award
is payable based entirely on the achievement of corporate
financial and strategic goals. Please see the “Compensation
Discussion and Analysis” section of this Proxy Statement
for more information regarding the annual incentive
awards, including the performance metrics applicable to
such awards.
SALARY AND BONUS IN PROPORTION TO TOTAL COMPENSATION
As noted in the “Compensation Discussion and Analysis”
section of this Proxy Statement, the Compensation
Committee heavily weighted total direct compensation
toward the variable elements, which include annual incentive
compensation and long-term incentive compensation, in
order to hold executives accountable and reward them for
the results of the Company. Our Compensation Committee
structured the compensation program to give our named
executive officers substantial alignment with stockholders,
while also permitting the committee to incentivize the named
executive officers to pursue performance that it believes
increases stockholder value. Please see the “Compensation
Discussion and Analysis” section of this Proxy Statement for
a description of the objectives of our compensation program
and overall compensation philosophy.