First Data 2011 Annual Report Download - page 139

Alignment of the executives' interests with the interest of shareholders is created via equity compensation and annual incentive
compensation, the value of which is driven by company performance over the long and short term, respectively. Other than base pay,
FDC offers few non-performance based elements of compensation, such as executive benefits and perquisites.
When considering the design of FDC compensation plans, incentive plan funding schemes, and individual compensation
decisions, the Committee carefully considers each of the following four guiding principles of FDC's executive compensation
programs. These objectives work together to bring an appropriate balance to FDC compensation programs and have remained a
consistent guide for the Committee over the last several years.
• Align compensation with company performance and creation of shareholder value
• Facilitate equity ownership
• Drive behaviors consistent with FDC's core values
• Pay at a competitive market position
Align Compensation with Company Performance and Creation of Shareholder Value
The Committee places a great emphasis on the alignment of compensation with increased shareholder value. The annual cash
incentive and annual equity plans described below primarily drive this alignment.
Annual cash incentives are funded each year on the basis of overall company performance, while equity-based incentives are
designed to provide greater value to executives when they achieve long-term value creation. Together, these elements of
compensation reinforce the relationship between pay and performance.
FDC's incentive structure creates a strong incentive for executives to drive company performance over both the short and long
term, while ensuring alignment between long-term shareholder and executive interests.
Facilitate Equity Ownership
The 2007 Stock Incentive Plan for Key Employees of First Data Corporation and its Affiliates (the "2007 Equity Plan")
facilitates significant equity ownership by executive officers. All executive officers have purchased shares of stock and received
matching grants of stock options in Holdings. The Holdings Committee believes that by requiring a personal investment in Holdings,
the 2007 Equity Plan is a powerful mechanism to facilitate equity ownership and closely align executive and shareholder interests.
Beginning in 2011, executives are also eligible for annual equity grants which are intended to further reinforce this alignment.
Drive Behaviors Consistent with FDC's Core Values
FDC is entrusted with highly sensitive and confidential customer information and therefore requires the highest level of integrity
from its employees. During 2011, FDC stressed its vision, mission and core values to reflect FDC's purpose, long-term vision and the
global employee attitudes and attributes that drive the Company's success in the marketplace. FDC's five core values are: Put
Customers First, Empower our People, Act with Integrity, Deliver Excellence and Enjoy the Journey.
Executive behavior is considered by the Committee when determining annual executive incentive awards and all other
compensation decisions. Furthermore, FDC's annual objectives and strategies are closely aligned with FDC's vision, mission and
values. Success against these objectives and strategies is a key consideration in the Committee's evaluation of overall company
performance.
Pay at a Competitive Market Position
FDC and the Committee review the Company's executive compensation practices and targets against a peer group of companies
on an annual basis. FDC's current competitive positioning and the impact future decisions may have on such positioning are carefully
evaluated. The peer group used to assess competitive positioning reflects FDC's direct business competitors and companies with
which FDC competes for talent.
FDC's peer group remains the same as in 2010 and is comprised of direct competitors, frequently identified peer companies to
FDC's direct competitors, and other companies deemed comparable to FDC in terms of industry, pay practices, revenue and market
value. The 2011 peer group includes the following 21 companies:
• Accenture • ADP • American Express
• Capital One Financial • Computer Sciences Corp. • Discover Financial
• eBay • Fidelity Nat'l Info Services • Fifth Third Bancorp
• Fiserv • Mastercard • PNC Financial Services
• SAIC • SLM Corp. • State Street Corp.
• SunTrust Banks • Symantec Corp. • Total System Services
• Visa • Western Union • Yahoo!