43 / 68
based upon the Company achieving the RBC, SMR,
and OROE performance thresholds discussed
previously. Thus, unlike many companies where an LTI
award needs to only be earned once, the CEO’s LTI
award must be earned twice: (1) based upon relative
financial and TSR performance for the current year and
(2) based upon future performance against pre-
established, Compensation Committee approved
metrics and performance levels. As a result, we believe
that the approach to the CEO’s LTI grants – and his
overall compensation package – reflects the Company’s
continuing strong commitment to pay for performance.
The following table illustrates the process for
determining CEO TDC for 2014. TDC equals the sum of
base salary, annual bonus paid, and grant-date fair
value of LTI awards:
Based on the Company’s relative performance percentile ranking for 2014, the
CEO’s TDC was lowered by
51%
(or
$8,616,007) from the prior year TDC amount of $17,027,684.
RETIREMENT, DEFERRAL, AND SAVINGS PLANS
The retirement, deferral and savings plans described below were established in order to provide competitive post-
termination benefits for officers and employees of the Company, including the NEOs, in recognition of their long-term
service and contributions to the Company.
Defined Benefit Pension Plans
As described further in “Pension Benefits” below, the
Company maintains tax-qualified, noncontributory
defined benefit pension plans covering substantially all
U.S. and Japanese employees, including the NEOs,
who satisfy the eligibility requirements. The Company
also maintains nonqualified supplemental retirement
plans covering the NEOs. For 2014, new mortality
tables and interest rates had a significant impact on the
expense associated with the pension plans. As such,
the year-over-year change in pension value as shown in
the 2014 Summary of Compensation Table is
significantly higher than in previous years. Because of
the impact of the new mortality tables and changes in
interest rates, many U.S. companies have experienced
similar changes. No change has been made to the
pension plans and the benefit level remains the same.
Executive Deferred Compensation Plan
The U.S.-based NEOs, in addition to other U.S.-based
eligible executives, are entitled to participate in the
Executive Deferred Compensation Plan (“EDCP”). Mr.
Daniel P. Amos is the only U.S.-based NEO currently
participating in this plan. As more fully described under
“Nonqualified Deferred Compensation,” Mr. Tonoike
does not participate in the U.S.-based plan, but per his
employment agreement defers a portion of his bonus
until his retirement. The EDCP is discussed in more
detail
below
under
“Nonqualified
Deferred
Compensation.”
Performance for FY2014
Element
Amounts
Comments
Base Salary
$1,441,100
Paid in 2014
MIP Award
$4,829,415
Paid in March 2015 for 2014 performance
LTI (PBRS Contingent Grant)
$5,644,485
Contingent grant in February 2014 at 60% of 2013
grant value
-
$
3,503,323
Reduction in contingent grant from February 2014
after 2014 performance was validated on
December 31, 2014
PBRS Adjustment for 2014 Performance
$8,411,677
39
TDC