This excerpt taken from the HTZ DEF 14A filed Apr 15, 2009.
This compensation discussion and analysis provides information regarding our compensation programs for our named executive officers. We discuss the philosophy of our compensation programs, including how we determine the elements of compensation for our named executive officers, and why we have selected those elements in our compensation programs.
We believe that a skilled and motivated team of senior executives is essential to building lasting shareholder value. As a market leader in the car and equipment rental industries, we also understand that our senior executives are highly sought after. Therefore, we have structured our compensation programs to provide our named executive officers and other senior executives with levels of compensation that we believe are necessary to retain their services and to avoid the disruption and expense associated with unintended executive departures. Our short- and long-term incentive programs are also intended to reward our executives for performance measured against established goals that are important to us and to align our executives' interests with those of our shareholders, in each case with the ultimate objective of creating lasting shareholder value.
In the second half of 2008, our Compensation Committee examined our compensation programs in light of the recent overall economic downturn. At that time, the Compensation Committee considered whether compensation levels generally, and our performance-based compensation programs in particular, continued to serve the goals described above. In an effort to (1) adapt our compensation structure to a very different economic environment and to retain and incentivize management, (2) reward positive operational and financial performance, which we believe creates shareholder value and will be reflected in our market value over time and (3) provide realistic performance measures in the new environment, we made the following principal changes to our compensation programs in 2008:
no longer realistic and therefore provided insufficient direction and motivation to our management. See "Elements of our Compensation ProgramsAnnual Incentives."
In addition, independent of these changes, in February 2008 we entered into new Change in Control Agreements with certain of our named executive officers, and we adopted a new executive severance plan. See "Elements of our Compensation ProgramsEmployment and Severance Arrangements."
In 2009, we also examined our named executive officers' salaries in light of the worldwide economic downturn and adjusted them to reflect the effects of the downturn on our businesses.