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COMPENSATION DISCUSSION AND ANALYSIS
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We determined the compensation of our median employee by calculating the total annual compensation using the applicable components above and since our
2017 median employee terminated as an employee of the Company during 2018, we selected the next similarly situated employee from the 2017 analysis ranking employees (excluding our CEO) from highest to lowest paid.
The total annual compensation for our CEO as represented in the Summary Compensation Table was $6,077,880 and our Year 2 median employee was $151,356. The
resulting ratio is 40.2 to 1.
Post-Employment Compensation
The equity awards granted to our Named Executive Officers under the Companys 2009 Stock Incentive Plan, as amended and restated on April 20,
2017, and Change in Control Agreements approved by the Board on October 23, 2018 provide for accelerated vesting of any unvested shares in the event that (i) such equity awards are not assumed or replaced by the acquiring entity in
connection with a change in control of the Company or (ii) the Named Executive Officer is demoted, relocated, or terminated other than for misconduct within the period beginning upon the earlier of our execution of a definitive agreement that
results in a change in control or 90 days prior to a change in control and ending 18 months following the change in control transaction. We have provided for this treatment based on our belief that such treatment ensures that the executive officers
remain focused on their responsibilities in the event of a potential transaction that will result in a significant benefit to our stockholders. Additionally, the Change in Control Agreements provide twelve months of base salary, target bonus and
twelve months of COBRA should said events take place. The terms and conditions of these change in control provisions are provided at a level that the Compensation Committee believes to be comparable to those of companies of similar size in our
industry sector.
Welfare, Retirement, and Other Benefits
Welfare Benefits.
The Company maintains an array of benefit programs to meet the health care and welfare needs of our employees including medical
and prescription drug coverage, dental and vision programs, medical and dependent care flexible spending accounts, short-term disability insurance, long-term disability insurance, accidental death and dismemberment insurance, and group life
insurance, as well as customary vacation, paid holiday, leave of absence and other similar policies. Our executive officers, including the Named Executive Officers, participate in these benefit programs on the same general terms as all of our
salaried employees.
Retirement Benefits.
The Company has established a
tax-qualified
Section 401(k) retirement savings plan for our employees. Our executive officers, including the Named Executive Officers, are eligible to participate in this plan on the same general terms available to all of our full-time employees. Currently,
plan participants are provided with matching contributions that are subject to time-based vesting conditions. It is intended that this plan qualify under Section 401(a) of the Internal Revenue Code so that contributions by participants to the
plan, and income earned on plan contributions, are not taxable to participants until withdrawn from the plan. Our executive officers, including the Named Executive Officers, do not receive any retirement benefits beyond those generally available to
our full-time employees.
Perquisites and Other Personal Benefits.
In addition to the general welfare benefits described above, the
Compensation Committee has determined that we provide our executive officers, including the Named Executive Officers, with an annual physical examination beyond the benefit provided under our standard health care plans.
The Compensation Committee does not view perquisites or other personal benefits as a significant component of our executive compensation program and,
except as described in the preceding paragraph, did not provide any perquisites or other personal benefits to our executive officers during 2018.
Income Tax and Accounting Considerations
Deductibility of Executive Compensation.
Section 162(m) of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act of 2017 (the TCJA), effective for taxable years beginning on or
after January 1, 2018, generally disallows a deduction for federal income tax purposes to any
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