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This excerpt taken from the AHT DEF 14A filed Mar 31, 2006. 2005
Compensation for Executive Officers
For 2005, the primary components of Ashford’s
executive’s compensation consist of: (i) base
salaries; (ii) annual bonuses; and (iii) other
executive programs and benefits. Each element is described in
more detail below.
Base
Salaries
The Chief Executive Officer, utilizing the above factors,
reviews base salaries annually and makes recommendations to the
Committee. Any interim modifications to salaries are also based
on the above factors and recommendations are made to the
Committee. In March 2006, the Chief Executive Officer made
recommendations to the Committee with respect to increases in
the base salaries for each of our executive officers other than
the Chief Executive Officer, and the Committee and our Board of
Directors approved increased base salaries of $500,000,
$325,000, $325,000 and $220,000 for our Chief Operating Officer,
our Chief Financial Officer, our Chief Legal Officer and our
Chief Accounting Officer, respectively. These new base salaries
were effective as of January 1, 2006.
Annual
Bonuses
As revised in March 2006, the employment agreements for
each of the executive officers provide for a targeted annual
bonus during the terms of the respective agreements based on the
level of accomplishment of management and performance objectives
as established by the board or the Committee. Prior to the
revisions made in March 2006, each of the employment agreements
provided for a minimum and a maximum annual bonus amount. Each
of the executive officers received the maximum bonus amounts set
forth in their respective employment agreements for the 2005
fiscal year. In making its determination as to the level of
bonuses paid to the executive officers, the
Table of Contents
compensation committee utilized the services of a consulting
firm, which conducted a survey of executive officer compensation
within competitive industries and made a recommendation as to
bonuses for our executive officers.
Long-Term
Incentives
The Committee believes that Ashford’s key employees should
have an ongoing stake in the long-term success of the business.
The Committee also believes that key employees should have a
considerable portion of their total compensation paid in the
form of stock. This element of the total compensation program is
intended to align the executive’s interest to that of
Ashford stockholders through the granting of stock options,
restricted stock and other incentive-based awards. The same
factors that are used in determining other elements of
compensation are used in determining long-term incentive grants.
In March 2005, the Committee granted 188,900 shares of
common stock to executive officers, other than the Chief
Executive Officer, and 18,000 shares of common stock to
other key employees based, in part, on the performance of these
executive officers and employees during 2005. Additionally, in
March 2006, the Committee granted 320,000 shares of common
stock to executive officers, other than the Chief Executive
Officer, and 30,000 shares of common stock to other key
employees in March 2006 based, in part, on the performance of
these executives officers and employees during 2005. All such
shares will vest in equal annual installments on each of the
first three anniversaries of the date of issuance.
Other
Executive Programs and Benefits
During 2005, Ashford maintained an Employee Savings Incentive
Plan (“ESIP”). Under the ESIP, Ashford matched 25% of
a participant’s contribution to the ESIP, up to 10% of such
participant’s base salary. In January 2006, Ashford
implemented a 401(k) plan under which Ashford matches 50% of an
eligible participant’s contribution to the plan, up to 6%
of such participant’s base salary, subject to limitations
imposed by the Internal Revenue Service.
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