35 / 72
Strong Corporate Governance Policies and Leader in Best Practices
The Company has been a leader in corporate governance best practices and the Company’s executive compensation
programs reflect the following strong, longstanding governance principles:
What We Do
First public company in the U.S. to provide shareholders with a say-on-pay vote (voluntary action starting in
2008, three years before the vote became required)
Prioritize active engagement with our shareholders regarding our compensation program and history of
responding to our shareholders’ feedback in a timely manner
As a result of our rigorous pay-for-performance formulaic structure for CEO compensation, for the past 18
years, the CEO’s total direct compensation has been determined based on the Company’s performance
versus peers (relative financial performance (weighted 54%) and relative total shareholder return (“TSR”)
performance (weighted 46%)) and is regularly evaluated by the Compensation Committee
Independent Compensation Committee oversees the program
Independent compensation consultant,
Mercer LLC (the “Consultant”), is hired by and reports to the
Compensation Committee
Annual report by the Consultant to the full Board on CEO pay and performance alignment
Stock ownership guidelines for executive officers and Directors in place since 1998
Clawback policy in place since 2007
Supplemental Executive Retirement Plan frozen to new participants effective January 1, 2015
Double trigger change-in-control requirements in all employment agreements
What We Don’t Do
No golden parachute payments for CEO or President following a change in control
No entering into a 10b5-1 plan by officers or Board members unless approved by the Compensation
Committee
No hedging or short sales of Company stock by officers or Board members
No pledging of Company stock by executive officers or Board members as of February 2013
No grandfathered pledged Company stock counts toward the stock ownership guidelines
No repricing underwater stock options
No change-in-control excise tax gross-ups
A further summary of the CEO compensation program and its emphasis on pay-for-performance can be found below in
the “CEO and President Compensation and Pay-for-Performance” section of this CD&A.
28