GIS » Topics » Other Compensation Policies

This excerpt taken from the GIS DEF 14A filed Aug 10, 2009.
Other Compensation Policies
 
Stock Compensation Award Approval
 
In order to assure that the terms of all stock compensation awards fully reflect the intent of the board of directors and comply with all applicable requirements, we have strict administrative guidelines on the timing and approval of stock compensation awards. The compensation committee pre-approves all awards to senior vice presidents and higher-level executive officers, and the board pre-approves awards to the Chief Executive Officer. They typically approve these awards at the regularly scheduled June board meeting, when the rest of the annual and long-term incentive awards are granted to our employees. Under the terms of the 2007 and 2009 Stock Compensation Plans, the company cannot grant stock options at a discount to fair market value on the grant date. Except for the annual June grant, awards to executive officers may not be approved during trading blackout periods.
 
Independent Compensation Consultant Engagement
 
The compensation committee has adopted a policy for engagement of the committee’s independent compensation consultant, in order to ensure the consultant’s continuing independence and its accountability to the committee. The compensation committee has the sole authority to retain or replace the independent compensation consultant. Compensation committee approval is required prior to the company retaining the independent compensation consultant, or his or her firm, for any executive compensation services or other consulting services or products above an aggregate annual amount of $25,000. In accordance with the policy, the compensation committee selected the firm of Frederic W. Cook & Co., Inc. to be its independent consultant from fiscal 2010 forward. This firm performs no other services for the company.
 
Tax Deductibility of Compensation
 
Our Executive Incentive Plan, the 2007 Stock Compensation Plan and the proposed 2009 Stock Compensation Plan have each been structured with the intention that cash incentive payments, restricted


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stock units, stock options and stock appreciation rights awarded under these plans can qualify as performance-based compensation, which is tax-deductible to the company under Section 162(m) of the Internal Revenue Code.
 
The following tables and accompanying narrative disclosure should be read in conjunction with the Compensation Discussion and Analysis, which presents objectives of our executive compensation and benefits programs. The table below presents compensation for individuals who served as Chief Executive Officer and Chief Financial Officer during fiscal 2009, for each of the other three most highly-compensated executive officers who were serving as executive officers at the end of fiscal 2009 and for Mr. Darcy, an executive officer who retired during fiscal 2009 but who otherwise would have qualified to be a named executive officer (the “named executive officers”). Mr. Mulligan and Mr. Friendly were not named executive officers in fiscal 2007, and Mr. O’Leary was not a named executive officer in fiscal 2007 or fiscal 2008, and therefore information on their compensation for those fiscal years is not included.
 
Other Compensation Policies
 
Stock Compensation Award Approval Policy
 
In order to assure that the terms of all stock compensation awards fully reflect the intent of the board of directors and comply with all applicable regulatory requirements, we have strict administrative guidelines on the timing and approval of stock compensation awards. These guidelines have been reviewed by the company’s compensation committee and audit committee. The compensation committee must approve all stock compensation awards to senior vice presidents and higher-level executive officers. Except for annual stock option awards granted each June, which the Chief Executive Officer may approve for employees below senior vice president, no other stock options can be awarded to new or current employees except with the prior approval of the compensation committee. The compensation committee has delegated authority to the Chief Executive Officer to grant stock compensation awards other than stock options to employees below senior vice president, including incentive stock awards each June and restricted stock units throughout the year to new hires or for promotion, retention or recognition purposes. The Chief Executive Officer may only approve these stock compensation awards on two scheduled days in each calendar month to minimize the potential for error. Except for the annual June grant, stock compensation awards to executive officers may not be approved during trading blackout periods.


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For all stock option awards, the exercise price is equal to the closing sales price of our common stock on the New York Stock Exchange on the grant date or, if shares were not traded on that date, the most recent prior date when shares were traded. Under the terms of the 2007 Stock Compensation Plan, the company cannot grant stock options at a discount to fair market value on the grant date.
 
Tax Deductibility of Compensation
 
Our Executive Incentive Plan and the 2007 Stock Compensation Plan have each been structured with the intention that cash incentive payments, restricted stock units, stock options and stock appreciation rights awarded under these plans can be qualified performance-based compensation, which is tax-deductible to the company under Section 162(m) of the Internal Revenue Code.


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The following tables and accompanying narrative disclosure should be read in conjunction with the Compensation Discussion and Analysis, which presents objectives of our executive compensation and benefits programs. The table below presents compensation for individuals who served as Chief Executive Officer and Chief Financial Officer during fiscal 2008 and for each of the other three most highly-compensated executive officers who were serving as executive officers at the end of fiscal 2008 (the “named executive officers”). Mr. Mulligan and Mr. Friendly were not named executive officers in fiscal 2007, and therefore information on their fiscal 2007 compensation is not included.
 
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