American Home Shield 2009 Annual Report Download - page 150

Table of Contents
The following table sets forth information regarding the base salaries for our Named Executive Officers effective January 1, 2009.
2009 Salary Table
Named Executive Officer Increase % 2009 Salary
J. Patrick Spainhour 0.0% $ 950,000
Steven J. Martin 0.0% $ 350,000
Greerson G. McMullen 0.0% $ 405,000
Reggie L. Crenshaw 0.0% $ 250,000
Stephen M. Donly 0.0% $ 425,000
Mr. Donly was hired on March 23, 2009 with an annualized salary of $425,000. His 2009 actual salary was $329,080.
Annual Bonus Plan
To encourage our executive officers to focus on Company (and, where relevant, business unit) goals and financial performance, incentives under the
Annual Bonus Plan are based primarily on the performance of the Company with respect to the following measures at both a corporate consolidated as well as
business unit level:
Adjusted Comparable Operating Performance ("ACOP"), which is calculated by making the following adjustments to Comparable Operating
Performance (as defined in Item 7 of this Annual Report on Form 10-K): (1) adding back restructuring charges and Merger related charges;
(2) subtracting interest and net investment income and (3) adjusting for other normalization items as approved by the Board, including
adjustments for the following items in 2009 (i) the impact of our primary vehicle lessor electing not to renew its agreement with the Company in
2008; (ii) amending our consulting agreement with CD&R and entering new consulting agreements with our other Equity Sponsors in 2009; and
(iii) adding back expenses related to legislative changes at the corporate consolidated level and legal settlements at the business unit level, both of
which were deemed to be outside of current management's control for 2009;
Revenue; and
Cash Flow, which represents ACOP minus capital expenditures plus the change in net working capital (except that Cash Flow is not normalized
for the impact of the change in our vehicle leasing program as discussed above).
These performance measures were selected as the most appropriate measures upon which to determine annual bonuses because they are the primary
metrics that management and the Equity Sponsors use to measure the performance of the Company from year-to-year for purposes unrelated to compensation.
Depending on a Named Executive Officer's responsibilities, 90 percent to 100 percent of the opportunity for payment under the Annual Bonus Plan is based
on these three measures. In addition to these measures, we set goals for reduction in the turnover of customers in TruGreen LawnCare for Mr. Donly. Finally,
current plan year performance must exceed threshold performance for any payout under each performance measure.
For Named Executive Officers holding positions within corporate headquarter functions, such as Messrs. Spainhour, Martin, McMullen and Crenshaw,
Annual Bonus Plan payments are based 100 percent on overall Company performance. For our Named Executive Officer in charge of a business unit,
Mr. Donly, payments are based on both Company and business unit performance.
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