First Data 2012 Annual Report Download - page 134

PART III
ITEM 11. EXECUTIVE COMPENSATION
FIRST DATA CORPORATION
COMPENSATION DISCUSSION AND ANALYSIS
FISCAL YEAR 2012
EXECUTIVE SUMMARY
In 2012, the Governance, Compensation and Nominations Committee (the “Committee”) of First Data Corporation (“FDC” or
the “Company”) based funding for executive incentives on a comprehensive view of company performance, including financial and
strategic achievements. During 2012, the Committee rewarded employees, including senior executives of FDC based on improved
financial performance during 2012 and significant progress against First Data’ s six strategic pillars. Key initiatives supporting each
pillar are carefully tracked and results are monitored via a balanced scorecard of related metrics. This successful overall performance
was supported by financial results which, year over year, as measured by adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization), were 8.3% greater than 2011.
During 2012, FDC’ s executive team remained unchanged in support of our customer first philosophy and further leveraged our
broad global product set and positioned the company to fully take advantage of regulatory changes and emerging developments in the
payments industry.
On January 9, 2013 the Company announced via an 8-K filing that Jon Judge will be resigning from the role of Chief Executive
Officer. His post-termination compensation is detailed in the Retention and Transition Agreement, which was contained in the 8-K.
On January 28, 2013, the Company announced the appointment of Edward A. Labry III, 49, as interim Chief Executive Officer
of the Company. And on February 4, 2013, the departure of Kevin Kern, Executive Vice President, Operations & Technology, was
announced. Mr. Kern will be receiving benefits pursuant to the terms of the FDC Corporation Severance/Change in Control Policy.
At this time, it was also announced that executive officer, J. Mark Herrington, First Data’ s Executive Vice President, Global Product,
will be leaving the company.
FDC remains committed to a compensation philosophy, strategy, and process that incents and rewards both short-term and long-
term company performance. Details of the compensation philosophy and programs are addressed within the appropriate sections of the
following discussion.
ROLE OF THE COMMITTEE
The Committee reviews and approves all aspects of FDC’ s compensation programs for its executive officers. Specifically, under
its charter, the Committee is tasked with:
• establishing FDC’ s compensation philosophy;
• evaluating performance and setting compensation for FDC’ s executive officers;
• overseeing regulatory compliance with respect to compensation matters; and
• delegating to and monitoring various subcommittees with responsibility for administrative and legal compliance for
retirement and benefit plans.
During 2012, the Committee was comprised of Scott C. Nuttall (Chairperson), Joe W. Forehand and Henry R. Kravis. All of
the foregoing individuals are affiliated with Kohlberg Kravis Roberts & Co. (“KKR”) and, therefore, not deemed independent
Directors. Disclosure of payments between FDC and KKR affiliates are described in Item 13 of this Form 10-K.
The equity compensation provided to the senior executives of FDC is approved by the Governance, Compensation and
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ominations Committee (the “Holdings Committee”) of First Data Holdings Inc. (“Holdings”), the parent corporation of FDC (the
“Committee” and the “Holdings Committee” together referred to as the “Committees”). The Holdings Committee is comprised of the
same individuals as are members of the Committee.
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