American Home Shield 2010 Annual Report Download - page 123

Table of Contents
ITEM 11. EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This section describes the material elements of our 2010 executive compensation program and the principles underlying our executive compensation
policies and decisions. In addition, in this section we provide information regarding the compensation paid to our CEO (principal executive officer), Chief
Financial Officer ("CFO") (principal financial officer) and the three most highly compensated executive officers (other than the CEO and CFO) who were
serving as such as of the end of our most recent fiscal year (collectively referred to as our Named Executive Officers ("NEOs")).
Highlights
Underscoring our pay-for-performance philosophy, the NEOs with Company-wide responsibilities earned payouts for 2010 under our Annual
Bonus Plan equal to 67.7 percent of the target payout. The amount earned reflects above target achievement of revenue goals and above threshold
performance against the Adjusted Comparable Operating Performance goal (defined below). No payout was earned under the Annual Bonus Plan
for the cash flow component as threshold performance was not achieved.
Base salaries of our NEOs were increased by percentages ranging from 2.8% to 14.3% in 2010 to better align base salary levels with competitive
pay levels for similar positions in the marketplace.
The NEOs, other than Mr. Spainhour, our current CEO, were awarded RSUs, vesting over three years, to promote continuity of leadership in the
senior management team after the announced retirement of Mr. Spainhour in September 2010 and to further align the long-term interests of
senior management with Holdings' primary ownership group.
The Company hired Harry J. Mullany III, who commenced service with the Company on February 22, 2011 and will assume the role of CEO on
March 31, 2011. Details of his compensation package are presented under the 2011 Employment Agreement with New CEO heading in this
Item 11.
Objectives of Our Compensation Program
Our compensation plans for executive officers (including the NEOs) 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;
Align our executives' long-term interests with those of Holdings' primary ownership group through meaningful direct and indirect share
ownership; and
Appropriately balance long and short-term incentive compensation so that short-term performance is not emphasized at the expense of long-term
value creation.
Elements of Executive Compensation, including for NEOs
To meet these objectives, our executive compensation program for 2010 consisted of the following:
Base salary, which is intended to attract and retain highly qualified executives and to recognize individual performance by the executive;
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