31 / 68
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) – averaging better than 96% “FOR” vote since
implementation through 2013
As a result of our rigorous pay-for-performance formulaic structure for CEO compensation, for the past 17
years, the CEO’s total direct compensation has been determined based on the Company’s performance
versus peers and is regularly evaluated by the Compensation Committee
Based on lower shareholder say-on-pay vote support in 2014 relative to the vote in the prior six years, we
modified the CEO pay-for-performance evaluation process to better align the CEO’s compensation for 2014
with the Company’s 2014 relative financial and total shareholder return performance, eliminating the time lag
under the program
Independent Compensation Committee oversees the program
Independent compensation consultant,
Mercer LLC (the “Consultant”), 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 in 2014
What We
Don’t Do
No golden parachute payments for CEO 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 Compensation and Pay-for-Performance” section of this CD&A.
27