American Home Shield 2008 Annual Report Download - page 137

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Table of Contents
Our compensation program is administered by our Board, with the exception of the ServiceMaster Global Holdings Stock Incentive Plan (the "MSIP"),
which is administered by the Holdings Compensation Committee.
Objectives of Our Compensation Program
Our compensation plans for executive officers are designed to:
attract, motivate and retain highly qualified executives;
reward successful performance by the executives and the Company by linking a significant portion of compensation to financial and business
results; and
align our executives' long-term interests with those of our ownership.
To meet these objectives, our executive compensation program consists of several elements, including:
base salary, which is intended to attract and retain highly qualified executives and to reward individual performance by the executive;
annual bonus, which is a cash incentive intended to reward the executive based on short-term Company performance;
long-term incentive plans, which are intended to reward the executive based on successful long-term Company performance and to provide
equity and ownership of the organization to our executives to ensure goal alignment with our primary ownership;
retirement and deferred compensation plans, which are intended to attract and retain qualified executives by ensuring that our compensation
program is competitive; and
employee benefits and perquisites, which are also intended to attract and retain qualified executives by ensuring that our compensation program
is competitive.
We believe the design of our executive compensation program creates alignment between performance achieved and compensation rewarded and
motivates achievement of both annual goals and sustainable long-term performance.
Determination of Executive Compensation
The Board is responsible for the determination of executive compensation and considers objective and subjective factors in structuring the executive
compensation program. These factors include competitive pay practices, individual performance and potential and historical compensation levels.
Given the competitiveness of the market for executive talent, coupled with our growth strategy, we believe that our executive compensation program
must closely reflect the realities of our business environment and support our commitment to our long-standing values. As a result of this focus, we rely
heavily on competitive pay practices and individual performance in determining the compensation of our executives. In making these determinations, we also
consider potential career progression within the Company and historical compensation levels. Furthermore, the compensation program and underlying
philosophy are reviewed at least annually to determine what, if any, modifications should be considered.
As part of our review of competitive pay practices, ServiceMaster engaged Hewitt Associates ("Hewitt") in 2007 to conduct a total market review to
determine whether our compensation program was competitive and aligned appropriately. Companies used for the executive compensation pay comparison
included a broad group of companies similar in size to
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