ADT 2015 Annual Report Download - page 36

COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION OF EXECUTIVE OFFICERS
Compensation Discussion and Analysis
This Compensation Discussion and Analysis section of the Proxy Statement describes in detail the Company’s executive compensation
philosophy and programs, as well as the compensation decisions made by the Compensation Committee and the factors which were
considered in making those decisions. This Compensation Discussion and Analysis focuses on the compensation of our Named Executive
Officers (the “NEOs”) who, for fiscal year 2015, are listed below.
Name Title
Naren Gursahaney President and Chief Executive Officer (“CEO”)
Michael Geltzeiler Senior Vice President and Chief Financial Officer (“CFO”)
Jerri DeVard Senior Vice President and Chief Marketing Officer
Alan Ferber President, Residential Business Unit
N. David Bleisch Senior Vice President and Chief Legal Officer
This Compensation Discussion and Analysis also describes the
compensation programs that apply to executives, other than the
NEOs, that report directly to the CEO (collectively, with the NEOs, the
“Executive Officers” of the Company).
Executive Summary
Fiscal year 2015 was a year of transition for ADT. The Company met
all of its major financial and operational goals and made further
progress toward building a foundation for profitable growth. ADT
continued to build on its market leadership position by focusing on
customer retention, enhancing the customer experience and adding
high-quality customers. The Company also continued to invest in new
business opportunities by expanding further into the Commercial
market, growing the Health business, and laying the foundation to
serve adjacent and unpenetrated markets. The Company expects
these efforts to fuel improvements in its business performance and
deliver profitable growth, creating long-term value for the Company’s
stockholders.
Business Overview
ADT is a leading provider of monitored security, interactive home and
business automation and related monitoring services in the United
States and Canada. ADT has one of the most trusted and well-known
brands in the monitored security industry today. The Company
currently serves approximately 6.6 million residential and business
customers, making it the largest company of its kind in both the
United States and Canada. ADT delivers an integrated customer
experience by maintaining the industry’s largest sales, installation and
service field force as well as a monitoring network; all backed by the
support of approximately 17,100 employees. The Company’s broad
and innovative set of products and services, including interactive
home and business solutions and home health services, meet a
range of customer needs for today’s active and increasingly mobile
lifestyles. ADT believes it is well positioned to continue to lead the
large and growing residential and business security market, and that
its demonstrated expertise and established footprint will help it to
maintain a leadership position in the evolving market for home
automation, home health monitoring, lifestyle and business
productivity solutions.
Fiscal Year 2015 Business Highlights
The Company continued to make strong improvements in operational
performance, resulting in solid financial results for fiscal year 2015.
ADT also made significant progress on a number of strategic
initiatives, positioning the Company to drive further improvements in
the coming year. Highlights of ADT’s significant achievements in fiscal
year 2015 include:
•Grew recurring revenue to $3.3 billion, a 5.4% increase over fiscal
year 2014;
•Improved diluted earnings per share by 3.6% to $1.72, up from
$1.66 for fiscal year 2014;
•Increased Earnings Before Interest, Taxes, Depreciation and
Amortization before special items (“EBITDA”)* by 2.3% over fiscal
year 2014;
•Significantly improved unit-based customer retention in the
residential and business channels, improving 100 basis points
from fiscal year 2014 to 87.8% from 86.8%;
•Grew the total number of customers on the Company’s interactive
remote monitoring and home/business automation system, ADT
Pulse®(“Pulse”), to 1.5 million, with total Pulse customers now
accounting for 23% of ADT’s total customer base, and more than
75% of new direct residential customers purchasing a Pulse
system;
•Returned over $460 million to stockholders in the form of
dividends ($142 million) and share repurchases ($324 million);
and
•Positioned the Company for future success in the Canadian
market by hiring a President of the Canadian segment.
* For a definition of non-GAAP financial measures and a reconciliation to GAAP
measures, see “Reconciliation of Non-GAAP Measures to GAAP Measures and Selected
Definitions” on page 53 of this Proxy Statement.
Pay for Performance
We recognize that there are different perspectives on assessing
whether or not a company “pays for performance,” as well as on
measuring how a company “performed.” We view the Company’s
performance as the degree of achievement of financial and
operational goals as well as stockholder return.
Compensation opportunities are designed to align executives’ pay
with the Company’s performance, and are focused on producing
26 The ADT Corporation 2016 Proxy Statement
PROXY STATEMENT