GVHR » Topics » Annual Cash Incentives

These excerpts taken from the GVHR 10-K filed Apr 30, 2009.

Annual Cash Incentives

 

We believe that our named executive officers should be eligible to receive annual cash rewards linked to achievement of specific short-term goals, both as a company and within the executive’s individual business unit or function. We establish an operating plan each year that outlines our short-term (annual) goals, consisting of both financial goals and individual business unit or function goals. As such, our annual incentive plan includes an opportunity to earn a cash reward each year based on a mix of both corporate financial and individual business unit or function performance goals; however, the CEO’s annual cash incentive was solely based on Company performance objectives.  Each metric has levels of performance results that correspond with an earned award level increasing incrementally, starting at 50% of target for threshold performance, to 100% at target performance, and up to 150% of target at superior performance.

 

For 2008, a substantial portion of each named executive officer’s total target pay opportunity - from approximately 24% to 27% - consisted of the annual incentive element, in line with emphasis on performance based pay.

 

Annual Cash Incentives



 



We believe
that our named executive officers should be eligible to receive annual cash
rewards linked to achievement of specific short-term goals, both as a company
and within the executive’s individual business unit or function. We establish
an operating plan each year that outlines our short-term (annual) goals,
consisting of both financial goals and individual business unit or function
goals. As such, our annual incentive plan includes an opportunity to earn a
cash reward each year based on a mix of both corporate financial and individual
business unit or function performance goals; however, the CEO’s annual cash
incentive was solely based on Company performance objectives.  Each metric has levels of performance results
that correspond with an earned award level increasing incrementally, starting
at 50% of target for threshold performance, to 100% at target performance, and
up to 150% of target at superior performance.



 



For 2008, a
substantial portion of each named executive officer’s total target pay
opportunity - from approximately 24% to 27% - consisted of the annual incentive
element, in line with emphasis on performance based pay.



 



This excerpt taken from the GVHR DEF 14A filed Apr 17, 2008.

Annual Cash Incentives

        We believe that our named executive officers should be eligible to receive annual cash rewards linked to achievement of specific short-term goals, both as a company and within the executive's individual business unit or function. We establish an operating plan each year that outlines our short-term (annual) goals, consisting of both financial goals and individual business unit or function goals. As such, our annual incentive plan includes an opportunity to earn a cash reward each year based on a mix of both corporate financial and individual business unit or function performance goals. Each chosen metric has levels of performance results that correspond with an earned award level funded at 50% of target for threshold performance, 100% at target performance and 150% of target at superior performance.

This excerpt taken from the GVHR DEF 14A filed Apr 12, 2007.
Annual Cash Incentives
 
We believe that our named executive officers should be eligible to receive annual cash rewards linked to our achievement of specific short-term goals, both as a business and within the executive’s individual portfolio. We establish an operating plan each year that outlines our short-term (annual) goals, consisting of both financial goals and individual goals. As such, our annual incentive plan includes an opportunity each year based on a mix of both corporate financial and individual (business unit) performance goals. Each chosen metric has a pre-established threshold, target and superior performance goal that corresponds with an earned award level.
 
For 2006 the annual incentive opportunity for our named executive officers, other than the CEO, was comprised of a corporate earnings per share (“EPS”) performance goal weighted 50%, and other performance metrics weighted 50%. Our CEO’s annual cash incentive, however, consisted entirely of financial goals, as he is compensated under the terms of our shareholder-approved 2005 Executive Incentive Compensation Plan. This is an Internal Revenue Code Section 162(m)-compliant plan, and outlines those financial goals which may be used to measure the performance of any executive who is paid under its terms. Mr. King was also placed under the terms of the 2005 Executive Incentive Compensation Plan for the 2006 annual incentive plan, but was not paid under its terms due to his departure during the course of 2006.
 
For 2006, a substantial portion of each named executive officer’s total pay opportunity — from approximately 25% to 31% — consisted of the annual cash incentive element, in line with our pay-for-performance philosophy. The target award opportunities were set for each named executive officer as a percentage of base salary, as indicated on the charts below. Annual incentive performance metrics for each of our named executive officers (who were employed the entire year) in 2006, and therefore subject to their executive scorecards, included an earnings per share, or EPS ($1.50 at target) goal. In addition to the shared EPS metric, our named executive officers, other than the CEO, shared a net income goal ($42.3 million at target), in addition to a variety of other individual performance goals unique to their respective business units.


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Table of Contents

 
Our CEO’s annual incentive opportunity was based on the (shared) EPS goal, client employee count (157,500 at target) and return on equity (24.5% at target) metrics. These were weighted as 50%, 30% and 20%, respectively, of the CEO’s potential annual cash award. Under the 2005 Executive Incentive Compensation Plan, the annual cash award for the CEO is subject to downward adjustment only based on certain performance considerations, which for 2006 included gross profit mix and annual operating income per paid client employee.
 
The 2006 target and actual paid annual cash incentives are as follows:
 
                                 
    2006 Target as % of
    2006 Target Annual
    2006 Actual Annual
       
Named Executive Officer
  Base Salary     Cash Incentive     Cash Incentive        
 
Erik Vonk, Chairman and CEO
    135 %   $ 877,500     $ 148,339          
Peter C. Grabowski, SVP, National Sales and Field Service Operations/Chief Financial Officer
    50 %   $ 175,000     $ 100,000          
Clifford M. Sladnick, SVP and Chief Administrative Officer
    66.7 %   $ 233,450     $ 100,000          
Roy C. King, Former President and Chief Operating Officer
    80 %   $ 332,000                
Lisa Harris, Former SVP and Chief Technology Officer
    66.7 %   $ 241,200                
Sal J. Uglietta, Former SVP, Benefits and Insurance Programs
    66.7 %   $ 231,150     $ 231,150          
 
While we saw year-over-year increases in EPS, we did not meet our EPS or net income objectives for 2006 and, in line with our pay for performance philosophy, the named executive officers’ annual cash incentive payments were appropriately impacted. Both Messrs. Grabowski and Sladnick were, overall, successful in meeting their other individual metrics. In addition, because Messrs. Collins and Benz joined us after the 2006 performance metrics were established in February 2006, and given their brief tenure, the Committee determined that each of them were eligible to receive a bonus for their service in 2006. Mr. Collins was paid $75,000, and Mr. Benz was paid $45,000. They will participate fully in the 2007 annual cash incentive program.
 
Because our return on equity performance results was above the pre-established threshold goal, Mr. Vonk was eligible to receive an annual incentive award reflective of the degree of achievement on this metric. The Committee did not adjust Mr. Vonk’s earned award downward from this amount. Mr. King and Ms. Harris received no short-term incentive awards due to their departures during the course of 2006. Mr. Uglietta received his short-term incentive award (at target) as a part of his severance agreement with us.
 
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