Compensation Risk Management
A primary area of focus of the Compensation Committee is compensation risk management. The committee, together with its compensation consultant,
conducts annual risk assessments of our compensation program, which include process, tone and culture. Our compensation risk management processes also include involvement from our Internal Audit and ERM functions. Based on these various steps, we do
not believe that our compensation program creates risks that are reasonably likely to have a material adverse effect on the Company.
Moreover, our compensation programs and risks are routinely discussed at the Board level, both with and without the CEO present. In particular, the
chairperson of our Compensation Committee reports to and discusses compensation risk issues with the full Board and the Risk Committee. The chairperson of the Compensation Committee and one other member of the committee (who also serves as the
chairperson of the Audit Committee) are members of the Risk Committee of the Board of Directors. Additionally, certain compensation matters are also reviewed with the Audit Committee, specifically as it relates to exclusions under our ICP funding.
A
NNUAL
S
AY
ON
P
AY
; F
OCUS
ON
S
TOCKHOLDERS
Say on Pay Annual Frequency
We submit an advisory vote on executive compensation, or Say on Pay, to our stockholders on an annual basis. Our Board of Directors values the
opinions of our stockholders and believes an annual advisory vote allows our stockholders to provide us with their input on our executive compensation program.
In 2018, over 96.6% of the votes cast approved our 2017 executive compensation program (as described in our 2018 proxy statement). In light of the
strong voting support and the extent of other feedback we have solicited from our stockholders, the Compensation Committee remained consistent with our executive compensation philosophy, policies or overall program, and did not make any material
changes. Nevertheless, we continue to carry out our executive compensation program based on our key philosophy and objectives as described above. The Compensation Committee will continue to consider changes to the program on an ongoing basis, as
appropriate, in light of evolving factors such as our corporate strategy, the business environment and competition for talent, as well as stockholder feedback.
Stockholder Focus and Outreach
We are focused on the interests of our stockholders. Our two primary performance
metrics selected for our performance-based incentive awards that measure stockholder return are: (i) TSR (for our executives PRSUs); and (ii) ROE (for our annual incentive compensation awards). We measure performance against our own
goals and/or relative to our peer performance. Additionally, we conduct active investor outreach activities throughout the year to engage with our stockholders. Additionally, as part of our annual proxy statement preparation process, we routinely
and proactively reach out to our key stockholders to invite their feedback, including their view about our executive compensation program. We did not receive any feedback from stockholders in 2018 that prompted any material changes to our
compensation program.
C
OMPENSATION
D
ECISION
C
ONSIDERATIONS
As further discussed below, in making compensation decisions, the Compensation Committee considers a variety of factors and data, including peer
benchmarking and other industry data, performance considerations, and application of committee discretion, if and as necessary.
Competitive Benchmarking Against Peers
For 2018, the Compensation Committee benchmarked and compared our compensation and performance with our peer companies, in a manner consistent with
prior years. Our 2018 Peer Group companies remained the same as 2017 and are listed below.
The Compensation Committee,
with its compensation consultant and management, reviews on at least an annual basis, the composition of the peer group. In determining the composition, the Compensation Committee considers various factors and characteristics including, among other
things, industry, business model, complexity of the business, geography, market capitalization, asset size, assets under management, number of employees, performance on financial and market-based measures, and extent they compete with us for talent.
It is important to note that in determining executive compensation, the Compensation Committee does not solely rely on comparative data from the
2018 Peer Group. Such comparative data provides helpful market information about our peer companies, but the Compensation Committee does not target any specific positioning or percentile, nor does it use a formulaic
|
|
|
|
|
|
|
|
|
|
|
|
|
37
|
|
|
|
2019 PROXY STATEMENT
|