Assurant 2005 Annual Report Download - page 23

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is composed of three non-employee, independent directors. The Committee approves, administers and
interprets the Company’s compensation policies and is responsible for administering the Company’s executive incentive programs and
establishing the compensation for the Chief Executive Officer. This report summarizes the Committee’s compensation policies governing
compensation to executive officers, the relationship of corporate performance to that compensation, and the bases for the compensation of the
Chief Executive Officer in 2004.
Executive Compensation Policy
The Compensation Committee’s objective is to attract, retain, and motivate highly talented individuals in a manner that provides incentives
for outstanding performance, the attainment of the Company’s strategic business objectives, and the enhancement of stockholder value. The
Company’s executive compensation program includes four principal components:
Total compensation for executives is intended to be competitive with compensation in the insurance and financial services industry for officers
with similar positions and responsibilities.
Components of Executive Compensation for 2004
Base Salary. Salaries for the executive officers are determined by evaluating company and individual performance for the prior year, each
executive’s role and responsibilities, and competitive pay levels. The Committee reviews peer group and other market data to evaluate salary
levels but also exercises subjective judgment with respect to individual performance and compensation objectives. Total salary paid to the
executive officers named in the Summary Compensation Table for 2004 (the “named executive officers”) is reported in the “salary” column.
Short-Term Incentives. Short-term incentive awards are issued pursuant to the Company’s Executive Management Incentive Plan (the
“EMIP”).
Participation in the plan is limited to senior officers of the Company and its subsidiaries who are selected to participate in the plan for
a given year by the Compensation Committee.
Each participant in the plan is eligible to receive an annual cash bonus based upon the attainment of performance goals set for that year by
the Compensation Committee. Performance goals may be based on one or more performance criteria expressed in terms of Company-wide
objectives or in terms of objectives that relate to the performance of an affiliate or a division, department, region or function within the
Company or an affiliate. Annual targets are weighted to reinforce the Company’s strategic goals.
At the time the Compensation Committee sets the performance goals for a particular year, it also establishes target bonuses, expressed as a
percentage of each participant’s salary, which will be awarded to the participant if the designated performance goals are achieved. Payments
under the plan are made promptly after the Compensation Committee determines that the relevant performance goals and other terms of the
plan were satisfied in connection with such payments.
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•
Base Salary
—
designed to provide base pay at a level consistent with the individual
’
s position and contributions to the Company
• Short-Term Incentives — designed to make a portion of each executive’s annual compensation dependent upon the achievement of
specific performance goals relating to the Company as a whole and, where appropriate, specific operating business segments
•
Long
-Term Incentives — intended to promote the Company’s success and to enhance its long-
term value by linking the personal interests
of participants to those of the stockholders through the grant of stock
-
based awards
•
Retirement Program Contributions
—
intended to provide appropriate retirement benefit opportunities to executives