Travelzoo 2015 Annual Report Download - page 24

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20
The Committee did not engage an outside consulting firm to provide advice on executive compensation.
Components of Executive Compensation
The Committee has structured an executive compensation program comprised of base salary, cash bonus, equity and
non-equity incentive pay.
Base Salary
The Committee considered two types of potential base salary increases for the named executive officers in 2015: (1)
"merit increases" based upon each named executive's individual performance; and/or (2) "market adjustments" based upon the
salary range for similarly situated executives.
In determining merit increases, the Committee considers the specific responsibilities of the executive and the
executive's overall performance and tenure with the Company. In addition, the Committee also considers the CEO's evaluation
of each named executive officer in making the decision regarding merit increases.
The Committee determines any market adjustments based on the Committee's comparison of the executive's
compensation with statistical information on average compensation for similarly situated executives that is publicly available.
The Committee did not make any changes to the base salaries of its named executive officers.
Incentive Bonus Pay
In 2015, 2014 and 2013, Mr. Christopher Loughlin, Mr. Glen Ceremony, Ms. Vivian Hong, Mr. Richard Singer, Mr.
Michael Stitt, and Mr. Simon Talling-Smith received incentive bonuses pursuant to the terms of their employment agreements
and the discretion of the Board of Directors.
Pursuant to the terms of Mr. Loughlin's employment agreement dated November 18, 2009, effective July 1, 2010 and
as amended January 1, 2013 and August 1, 2013, Mr. Loughlin was eligible to receive a quarterly Performance Bonus as set
forth below.
Mr. Loughlin was eligible to receive a quarterly Performance Bonus for each quarter during 2015. The quarterly
Performance Bonus is calculated based upon worldwide revenue, operating income and audience targets. The revenue bonus is
calculated based upon a sliding scale that ranges from 95% through 105% achievement of the target resulting in a potential
bonus that ranges from $28,000 to $56,000. The quarterly revenue bonus at 100% of target is $46,667 and the maximum
revenue bonus is $56,000. The revenue bonus requires that there are no more than two significant customers and that no
significant customer is 17% or more than worldwide revenue. The operating income bonus is calculated based upon a sliding
scale that ranges from 90% through 105% achievement of the target resulting in a potential bonus that ranges from $28,000 to
$56,000. The quarterly operating income bonus at 100% of target is $46,666 and the maximum operating income bonus is
$56,000. The audience bonus is calculated based upon achievement of certain audience targets resulting in a potential bonus of
up to $46,667. The total maximum Performance Bonus per quarter for the revenue, operating income and audience components
combined is $158,667.
Mr. Loughlin earned a quarterly bonus for revenue for the first and second quarters, operating income for the first and
fourth quarters and audience for the first and third quarters of 2015. Mr. Loughlin received Performance Bonuses totaling
$235,593 during 2015. For 2015, Mr. Loughlin received 37% of the maximum Performance Bonus. The Company believes that
targets set for worldwide revenue, operating income and audience align with the Company's desire to continue to grow the
business. Since the individual targets are intended to be challenging, and since the separate targets related to different aspects of
the Company's performance, it is expected it will be difficult for all the targets to be achieved for any given year.
Pursuant to the terms of Mr. Ceremony's employment agreement dated May 9, 2011, effective June 15, 2011 and as
amended January 1, 2013, Mr. Ceremony is eligible to receive a quarterly Performance Bonus for each quarter during 2015.
The quarterly Performance Bonus is calculated based upon worldwide revenue, operating income and audience targets.
The revenue bonus is calculated based upon a sliding scale that ranges from 95% through 105% achievement of the target
resulting in a potential bonus that ranges from $10,000 to $20,000. The quarterly revenue bonus at 100% of target is $16,667
and the maximum revenue bonus is $20,000. The revenue bonus requires that there are no more than two significant customers
and that no significant customer is 17% or more than worldwide revenue. The operating income bonus is calculated based upon
a sliding scale that ranges from 90% through 105% achievement of the target resulting in a potential bonus that ranges from
$10,000 to $20,000. The quarterly operating income bonus at 100% of target is $16,667 and the maximum operating income