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Determination of CEO’s and President’s Compensation
In conjunction with the relative performance
assessment, total compensation levels for the CEO and
the President relative to the peer group are evaluated
with the help of the Consultant. The highest and lowest
paid CEOs among the peers are removed from the data
set to mitigate the effect of the outliers. Then, the
Company’s relative performance percentile ranking (10
out of 18, or 47
th
percentile ranking) is applied to the
remaining peer CEO compensation data for the
applicable year to derive an implied total compensation
amount for the Company’s CEO. The resulting implied
compensation level was used in determining the CEO’s
PBRS grant for 2015. Together with the base salary
and MIP, the final PBRS grant aligns CEO’s TDC with
the relative performance versus the peer group.
Once the CEO’s compensation package is determined,
the President’s compensation package was set to equal
55% of the CEO’s final package. The resulting implied
compensation level was used in determining the
President’s PBRS grant for 2015.
In addition to having to earn the PBRS grant amount
based upon the Company’s relative financial and TSR
performance, the 2015 grant of PBRS is not guaranteed
and is contingent based upon the Company achieving
the RBC performance thresholds discussed previously.
Thus, unlike many companies where an LTI award
needs to only be earned once, the CEO’s and
President’s LTI awards must be earned twice: (1) based
upon relative financial performance (54% weighting)
and relative TSR performance (46% weighting) for the
current year and (2) based upon future performance
against a pre-established, Compensation Committee
approved metric and performance level. As a result, we
believe that the approach to these two senior
executives’ LTI grants – and their overall compensation
packages – reflects the Company’s continuing strong
commitment to pay for performance.
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. employees, including the NEOs, who satisfy the
eligibility requirements. The Company also maintains
nonqualified supplemental retirement plans covering the
NEOs. No change has been made to the pension plans
and the benefit level remains the same as the prior
year.
Executive Deferred Compensation Plan
T
he EDCP is discussed in more detail below
under “Nonqualified Deferred Compensation.”
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.
401(k) Savings and Profit Sharing Plan
The Company maintains a tax qualified 401(k) Savings
and Profit Sharing Plan (the “401(k) Plan”) in which all
U.S.-based employees, including the U.S.-based NEOs,
are eligible to participate under the same terms. The
Company will match 50% of the first 6% of eligible
compensation that is contributed to the 401(k) Plan.
Employee contributions made to the 401(k) Plan are
100% vested. Employees vest in employer contributions
at the rate of 20% for each year of service the
employee completes. After five years of service,
employees are fully vested in all employer contributions.
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