Western Union 2015 Annual Report Download - page 84

66 | The Western Union Company
NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
PROPOSAL 2 ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
What We Don’t Do:
✗ No change-in-control tax gross ups for 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.
✗ Prohibition against pledging and hedging of Company securities by senior executives and directors.
✗ No dividends or dividend equivalents accrued or paid on PSUs or time-based restricted stock unit awards.
RECENT ENHANCEMENTS TO OUR EXECUTIVE COMPENSATION PROGRAM
Over the years, the Compensation Committee has engaged
in an ongoing review and evaluation of our executive
compensation and benefits programs in relation to our
compensation philosophy and objectives, as described in
“Compensation Discussion and Analysis—Establishing and
Evaluating Executive Compensation—Our 2015 Executive
Compensation Philosophy and Objectives” of this Proxy
Statement, and the interests of our stockholders. As a result
of that review, including our stockholder engagement efforts,
the Compensation Committee has taken the following
actions over the past few years to enhance our executive
compensation program:
• Created Standalone TSR PSUs: In 2014, to enhance focus
on stockholder returns, we replaced the TSR modifier from
our 2013 long-term incentive design with a standalone
TSR PSU. We maintained this compensation element as
part of our 2015 long-term incentive program. Over a
three-year performance period, these TSR PSUs require
the Company to achieve 30th, 60th or 90th percentile relative
TSR performance as compared to the S&P 500 Index
in order to earn threshold, target or maximum payout,
respectively.
• Increased Performance Period for PSUs: In 2014, we
increased the performance period of our PSUs to make
them subject to a three-year total performance period,
rather than the two-year performance period used in prior
years. We maintained the three-year performance period
for our 2015 PSUs.
• Diversified Long-Term Incentive Plan Mix and Increased
Weighting of At-Risk Awards: We increased the
percentage of our annual equity grants that have vesting
provisions that are strictly performance-based and at-
risk. For 2014 and 2015, the annual equity awards under
the Long-Term Incentive Plan consisted of 80% PSUs
(60% Financial PSUs, incorporating both revenue and
operating income growth, and 20% TSR PSUs) and 20%
stock options, as compared to 67% PSUs and 33% stock
options in 2013.
• Reduced Severance Benefits Under Executive Severance
Policy: 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.
• Enhanced CEO Stock Ownership Guidelines: In February
2016, the Compensation Committee increased the Chief
Executive Officer’s stock ownership requirement from a
multiple of five times to six times his base salary.
We believe that these practices, in combination with a
competitive market review, limited executive perquisites,
and reasonable severance pay multiples contribute to an
executive compensation program that is competitive yet
strongly aligned with stockholder interests.
The Board recommends that you vote in favor of the following
“say-on-pay” resolution:
RESOLVED, that the stockholders of the Company approve,
on an advisory basis, the compensation of the Company’s
named executive officers, as disclosed pursuant to Item
402 of Regulation S-K in the Compensation Discussion
and Analysis section, the tabular disclosure regarding
such compensation, and the accompanying narrative
disclosure, each as set forth in the Company’s Proxy
Statement for its 2016 Annual Meeting of Stockholders.