Determining Compensation for 2019
Role of the Compensation Committee
Each year, the Compensation Committee determines the appropriate level of compensation for our NEOs. As part of this process, the Compensation Committee
reviews all of the components of compensation for the NEOs and determines if each individuals total compensation is reasonable and consistent with the Companys compensation philosophy. The Compensation Committee reviews each component of
compensation individually and in total, references competitive market data including at the 50th percentile, and, after consideration of additional factors (e.g,. the executives
responsibilities, experience level, tenure, performance in the position and Company performance, including TSR), may make adjustments to any element of an executives compensation in establishing such executives total direct compensation.
The Compensation Committee then approves, with any modifications it deems appropriate, base salary ranges, target annual cash incentive award
opportunities and long-term incentive grants for the Companys NEOs.
In the course of this analysis and development of proposed total
compensation packages, WTW, the Compensation Committees external compensation consultant, reviews the relevant information and discusses its findings with the Compensation Committee.
The compensation package for the CEO is determined by the Compensation Committee and approved by the independent Directors of the Board during executive
session.
Role of the CEO and Management
The
CEO, in consultation with executive compensation leadership and WTW, prepares compensation recommendations for the NEOs (other than the CEO) and presents these recommendations to the Compensation Committee. These recommendations are based on the
CEOs personal review of each NEOs performance, internal equity considerations, job responsibilities and importance to our overall business strategy, as well as our compensation philosophy. Although these recommendations are given
significant weight, the Compensation Committee retains full discretion when determining compensation for the NEOs.
As part of this process,
individual elements of compensation provided to our NEOs are generally compared to general industry market data and peer group data and the total compensation package is considered in relation to the target established for the position, taking into
account the scope of responsibilities for the particular position. Total direct compensation (base salary, annual cash incentive and long-term incentive grants) also is evaluated in relation to the total compensation for positions with similar
levels of responsibility derived from the general industry market data and peer group data.
Role of the Compensation Consultant
To add rigor in the review process and to inform the Compensation Committee of market trends, the Compensation Committee engages the services of WTW, an
independent executive compensation consultant, to analyze our executive compensation structure and plan designs, and to assess whether the compensation program is competitive and supports the Compensation Committees goal to align the interests
of executive officers with those of shareholders. WTW also provides the Compensation Committee with market data, which the Compensation Committee generally references as a market check when determining compensation for executive officers.
In 2019, WTWs primary areas of assistance to the Compensation Committee were:
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Gathering information related to current trends and practices in executive compensation in response to questions raised by
the Compensation Committee and management;
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