the Committee assessed CAPs independence (along with that of its other direct and indirect consultants and advisors) in 2018 and concluded that CAPs work did not raise any conflict of
interest. In addition, the Committee has the authority to hire other experts and advisors as it deems necessary.
Management also supports the Committee by
providing analysis and recommendations. When setting levels of executive compensation, the Committee requests, receives, and considers the recommendations of the CEO regarding the performance of her direct reports and other Executive Officers.
Members of management also attend and contribute to Committee meetings as relevant to the Committee agenda.
The Committee discusses its fundamental views on
compensation and guiding principles, as well as its expectations of the CEOs performance and annual goals, with the CEO and subsequently proposes the CEOs goals to the Board for approval. The Committee does not include the CEO or other
members of management in its discussions with CAP on the CEOs compensation, nor does the CEO or management participate in the Committees recommendation to the Board on the CEOs compensation.
Say on Pay
At the 2018 Annual Meeting of Shareholders, 98.2% of Shareholders
voted, on an advisory basis, to ratify the NEO compensation. This Say on Pay vote reflected a significant increase over the 70.3% Shareholder vote from the 2017 Annual Meeting of Shareholders.
In response to the 2017 Say on Pay advisory vote and at the direction of the Committee, Company management solicited, and received, feedback from certain
proxy advisory firms and our Shareholders regarding the 2017 NEO compensation. Based on the feedback received, we made several changes to our executive compensation disclosure, including disclosing the peer group we use when making executive
compensation decisions, and disclosing the threshold, target, and maximum performance levels for our AIP and LTIP programs.
The Committee welcomes the opportunity
to provide additional insight into our executive compensation practices and appreciates the positive support from our Shareholders. We continue to believe that the overall structure of our compensation plans, the absence of excessive perquisites,
and our demonstrated
pay-for-performance
practices reflect the strength of the Companys executive compensation programs.
Executive Compensation Program
Guiding
Principles
The Committee has established a set of core principles that underlie our executive compensation program. These core principles provide guidance to
the Committee and management in making decisions while administering the program or when considering changes. These core principles include strong alignment between pay and performance, incentive to drive Shareholder value, and market
competitiveness.
Strong pay for performance alignment
We target
compensation around the median of the competitive market, with executives earning more or less than median, generally based on the performance of the Company and value delivered to Shareholders. Our core executive compensation program includes base
salary, an annual cash incentive plan (AIP), and long-term equity awards (LTIP). Both AIP and LTIP are administered under the Shareholder-approved 2010 Comprehensive Executive Compensation Plan, as amended (CECP). Incentive awards are
earned upon the achievement of short-term and long-term business goals that are reviewed and approved by the Committee at the beginning of each performance period. Performance goals are structured to reward business growth, profitability, relative
total shareholder return, balanced with productivity and risk and capital management.
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2019 Proxy Statement
Compensation Discussion and Analysis
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