American Home Shield 2009 Annual Report Download - page 148

Table of Contents
65 percent of his 2009 annualized salary, then prorated based on his hire date, which equals $214,945.
Determination of Executive Compensation
Pay Decision Process
The Board establishes the compensation of our Chief Executive Officer. In determining the Chief Executive Officer's compensation, the Board considers
the following factors: the operating and financial performance of the Company, the competitive market data provided by Hewitt Associates ("Hewitt") and
presented to the Board by our Senior Vice President, Human Resources, the Board's assessment of the Chief Executive Officer's individual performance and
prevailing economic conditions. The Chief Executive Officer recommends compensation for the Company's other executive officers based on his assessment
of each executive officer's individual responsibility, performance, overall contribution, the competitive market data provided by Hewitt and prevailing
economic conditions. The Board approves the compensation arrangements for each executive officer.
We believe that our executive compensation program must be attractive to compete in the market for executive talent and must support our growth
strategy. 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 historical compensation levels and the current ownership structure of the Company.
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 in 2008 to conduct a total market review to determine whether
executive officer cash compensation opportunities were competitive. Companies used for the executive compensation pay comparison included a broad group
of companies similar in size to ServiceMaster. In consultation with Hewitt, we developed a comparison group (the "Peer Group") consisting of more than 60
diversified or service, retail and manufacturing companies with revenues ranging from approximately one-half to two times our revenues. The decision to set
that range was made on Hewitt's recommendation due to our diversified business model and the comparability of compensation levels within that particular
revenue range. Regression analysis was used to further refine estimated market values to reflect our revenue size.
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