American Home Shield 2009 Annual Report Download - page 147

Table of Contents
In light of deteriorating global economic conditions in 2008, our Board decided not to increase base salaries of our Named Executive Officers in
2009.
As part of our strategy to forge a direct connection between our executive officers and shareholders, and in recognition of their hire into the
senior management team, Messrs. Crenshaw and Donly were invited to purchase ownership interests in Holdings and simultaneously were
granted options under the MSIP to acquire additional shares in the future. (This was also done previously for officers present at the time the
Equity Sponsors acquired ServiceMaster as well as for those subsequently hired or promoted.)
There were no significant changes in our pay programs and policies that were in place during 2008 with the exception of our change-in-control
severance agreements that were terminated in 2009 following the second anniversary of our acquisition by the Equity Sponsors. (See Item 12 of
this Annual Report on Form 10-K below for a summary of Holdings' ownership.)
Objectives of Our Compensation Program
Our compensation plans for executive officers (including the Named 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 primary ownership group through meaningful direct and indirect share ownership.
Elements of Compensation for Named Executive Officers
To meet these objectives, our executive compensation program for 2009 consisted of several elements, including:
Base salary, which is intended to attract and retain highly qualified executives and to recognize individual performance by the executive;
Annual cash incentive, which is intended to reward the executive based on short-term Company (and, where relevant, business unit)
performance;
Long-term cash incentive, which is intended to reward our executives based on long-term Company performance;
Stock and stock options to provide equity and ownership of Holdings to our executives to ensure goal alignment with the Company's primary
ownership group; and
Employee benefits and perquisites which are intended to attract and retain qualified executives by ensuring that our compensation program is
competitive.
Each of these elements, discussed in more detail below, plays an integral role in our balancing of executive rewards over short- and long-term periods.
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. With respect to Mr. Donly's annual cash incentive component, based on
performance under the terms of the Annual Bonus Plan, Mr. Donly would have earned $56,917; however, in accordance with Mr. Donly's offer of
employment, his 2009 bonus was guaranteed to be not less than
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