American Home Shield 2009 Annual Report Download - page 151

Table of Contents
Performance targets are established by the Board toward the beginning of each year and are based on expected performance in accordance with the
Company's and, where applicable, the business unit's approved business plan for the year. In the event the Company and, where applicable, the business unit
achieve the performance targets, payout under the Annual Bonus Plan would be 100 percent of a specified percentage of the executive's base salary. In the
event the Company and, where applicable, the business unit do not achieve the performance targets, a lesser bonus may be earned if the Company and, where
applicable, the business unit meet or exceed the threshold amounts for the performance targets, which are generally equal to the previous year's results
achieved for each performance measure. In the event the Company exceeds the performance targets, the amount of the bonus will increase accordingly. There
is no maximum payout under the Annual Bonus Plan on the theory that we pay for performance and our executives should receive additional compensation
when we exceed our performance goals.
The tables below provide information regarding the 2009 Annual Bonus Plan for our Named Executive Officers, including the performance goals and the
weight attached to each, the thresholds required for minimum payout, and the payout as a percentage of the target bonus if the threshold or target performance
is met. The performance goals and relative weighting reflect the Board's objective of ensuring that a substantial amount of each Named Executive Officer's
total compensation is tied to Company and, where applicable, business unit performance goals.
2009 Annual Bonus Plan Weighting
Participant
Organizational
Weighting
Performance
Weighting
% of Target
Performance for
Threshold Payout
% Payout With
Threshold
Performance
J. Patrick
Spainhour
100%
ServiceMaster
60% ServiceMaster
ACOP 96% 76%
Steven J. Martin
20% ServiceMaster
Revenue 98% 88%
Greerson G.
McMullen
20% ServiceMaster
Cash Flow 88% 28%
Reggie L.
Crenshaw
Stephen M.
Donly
40%
ServiceMaster
24% ServiceMaster
ACOP 96% 76%
8% ServiceMaster
Revenue 98% 88%
8% ServiceMaster Cash
Flow 88% 28%
60% TruGreen 30% TruGreen ACOP 89% 34%
10% TruGreen
Revenue 98% 88%
10% TruGreen Cash
Flow 84% 4%
10% TruGreen
Cancellation
Reduction 89% 34%
The "% of Target Performance for Threshold Payout"is equal to threshold performance (which is generally equal to the prior year's actual performance)
divided by the current year's target goal. (See table below.) The payout levels for performance between threshold and target are based on a 6:1 ratio—for
every one percent of achievement beyond threshold performance levels, the plan pays out an additional six percentage points of the targeted payout. The
Board has found the 6:1 ratio to be an effective motivator to improve over the prior year's results. The payout scale above target is a 4:1 ratio—for every one
percent of achievement above target, the plan pays out an additional four percentage points of the targeted payout. The payout scale below target is based on a
somewhat higher ratio to underscore the importance of achieving target performance and to provide a more material penalty for every percentage point
performance is below target.
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