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Manpower 10-K 2010 UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K/A
(Amendment
No. 1)
For
the fiscal year ended December 31, 2009
OR
Commission
File No. 1-10686
MANPOWER
INC.
(Exact
name of registrant as specified in its charter)
Registrant’s
telephone number, including area code: (414) 961-1000
Securities
registered pursuant to Section 12(b) of the Act:
Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes x No ¨
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the
Act. Yes ¨ No x
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No ¨
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. x
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer x Accelerated
filer ¨ Non-accelerated
filer ¨ Smaller
reporting company ¨
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ¨ No x
The
aggregate market value of the voting stock held by nonaffiliates of the
registrant was $3,317,445,824 as of June 30, 2009. As of February 16,
2010, there were 78,667,931 of the registrant’s shares of common stock
outstanding.
Introductory
Note
This annual report on Form 10-K/A for
the year ended December 31, 2009, has been filed to incorporate the disclosures
required under Item 10
Directors and Executive Officers of the Registrant, Item 11 Executive
Compensation, Item 12 Security Ownership of Certain Beneficial Owners and
Management and Related Shareholder Matters, Item 13 Certain Relationships and
Related Transactions, and Director Independence and Item 14 Principal Accountant
Fees and Services. Accordingly, this amendment only includes the
disclosures for Items 10, 11, 12, 13 and 14,
respectively. Except for the disclosures set forth below, this Form
10-K/A has not been updated to reflect events that occurred after the date of
the original annual report. As such, this Form 10-K/A should be read
in conjunction with our 10-K filing made with the SEC on February 19,
2010.
Set forth below are the name, age and
biographical information for each of our executive officers.
Set forth
below are the name, age and biographical information for each of our
directors.
Board
Composition and Qualifications of Board Members
The
nominating and governance committee has adopted, and the board of directors has
approved, guidelines for selecting board candidates that the committee considers
when evaluating candidates for nomination as directors. The
guidelines call for the following with respect to the composition of the
board:
In
connection with its consideration of possible candidates for board membership,
the committee also has identified areas of experience that members of the board
should as a goal collectively possess. These areas
include:
The
Company believes that the present composition of the board of directors
satisfies the guidelines for selecting board candidates set out above;
specifically, the board is composed of individuals who have a variety of
experience and backgrounds, the board has a core of business executives having
substantial experience in management as well as one member having government
experience, board members represent the best interests of all of the
shareholders rather than special interests, and ten of eleven directors are
independent under the rules of the New York Stock Exchange. The composition of
the board also reflects diversity of country of origin, gender, race and age, an
objective that the nominating and governance committee continually strives to
enhance when searching for and considering new directors.
In
addition, the particular areas of desired experience identified above that are
possessed by each director with significant or some experience is as
follows:
M. Bolland> – Active
CEO/COO/Chairman, Human Resources, Financial Oversight/Accounting, International
Business, Sales, Marketing/Branding, Operations and Government
Relations
G. Boswell> – Previous Board
Experience, Active CEO/COO/Chairman, Human Resources, Financial
Oversight/Accounting, International Business, Sales, Marketing/Branding,
Operations, Governance and Technology
T. Bouchard >- Previous Board
Experience, Human Resources, Financial Oversight/Accounting, International
Business, Sales, Marketing/Branding, Operations, Governance, Government
Relations and Technology
C. Dominguez> - Human
Resources, International Business, Operations, Governance and Government
Relations
J. Greenberg> - Previous Board
Experience, Active CEO/COO/Chairman, Ex-CEO, Human Resources, Financial
Oversight/Accounting, International Business, Marketing/Branding, Operations,
Governance, Government Relations and Technology
T. Hueneke> - Human Resources,
Financial Oversight/Accounting, International Business, Sales,
Marketing/Branding and Operations
R. Mendoza> - Previous Board
Experience, Human Resources, Financial Oversight/Accounting, International
Business, Sales and Operations, Governance
U. Payne> - Previous Board
Experience, Active CEO/COO/Chairman, Ex-CEO, Human Resources, Financial
Oversight/Accounting, International Business, Sales, Marketing/Branding,
Operations, Governance and Government Relations
J. Walter> - Previous Board
Experience, Active CEO/COO/Chairman, Ex-CEO, Human Resources, Financial
Oversight/Accounting, International Business, Sales, Marketing/Branding,
Operations, Governance and Government Relations, Technology
E. Zore> - Previous Board
Experience, Active CEO/COO/Chairman, Human Resources, Financial
Oversight/Accounting, Sales, Marketing/Branding, Operations, Governance,
Government Relations and Technology
Mr.
Joerres has experience in many of these areas as well, however his position on
the board is due to his position as CEO of the Company, as the board of
directors has determined the CEO should also be a director. For more
information on how each of the board of directors meets these objectives, see
their occupations and directorships disclosed previously.
AUDIT
COMMITTEE
The audit
committee consists of Mr. Zore (Chairman), Ms. Boswell,
Mr. Hueneke, Mr. Payne and Mr. Mendoza. Mr. Mendoza was
appointed to the audit committee on April 28, 2009. Each member of
the audit committee is “independent” within the meaning of the applicable
listing standards of the New York Stock Exchange. The board of directors has
determined that Mr. Zore is an “audit committee financial expert” and
“independent” as defined under the applicable rules of the Securities and
Exchange Commission.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a)
of the Securities Exchange Act of 1934 requires our directors and officers to
file reports with the Securities and Exchange Commission disclosing their
ownership, and changes in their ownership, of our common stock. Copies of these
reports must also be furnished to us. Based solely on a review of these copies,
we believe that during 2009 all filing requirements were met.
NOMINATION
PROCEDURES
CODE
OF BUSINESS CONDUCT
We have adopted a Code of Business
Conduct and Ethics that applies to our directors, officers and employees,
including our principal executive officer, principal financial officer,
principal accounting officer and controller. We have posted the Code on our
Internet website at www.manpower.com.
Compensation
Discussion and Analysis
Background
This
compensation discussion and analysis provides information about Manpower’s
compensation policies and decisions regarding the company’s CEO, CFO and the
five executive officers who are the leaders of the company’s business operating
units. In the discussion below, we refer to this group of executives as the
named executive officers (“NEOs”). This group includes the executive officers
for whom disclosure is required under the rules of the Securities and Exchange
Commission.
The
executive compensation and human resources committee of the board of directors
oversees the design and administration of Manpower’s compensation programs for
executive officers and certain other officers who, together with the Company’s
executive officers, comprise Manpower’s executive management team. A discussion
of the committee’s structure, roles and responsibilities and related matters can
be found under the heading “Meetings and Committees of the Board.”
Manpower
is a large global company with significant operations around the world.
Approximately 87 percent of Manpower’s revenues come from outside the United
States. The company does business in 82 countries, has nearly 4,000 offices and
about 28,000 staff employees globally, and placed around 3 million people in
jobs in 2009. Accordingly, Manpower needs executive talent with the competencies
and skills necessary to operate successfully in a variety of environments and
across countries and cultures. The company believes that its ability to attract
and retain executives who have these competencies and skills leads to the
creation of long-term shareholder value.
Executive
Summary
In making
decisions regarding compensation elements, program features and compensation
award levels, Manpower is guided by a series of principles, listed below. Within
the framework of these principles, Manpower considers the competitive market,
corporate, business unit and individual results, and various individual factors.
Although certain elements of compensation are tied to objective, predetermined
goals, compensation decisions are not strictly formulaic but reflect subjective
judgments as well.
Manpower’s
executive compensation guiding principles are to:
As
indicated, pay for results is a key element of Manpower’s compensation program.
The impact of this approach is evident from the compensation results over the
last two years. As a result of Manpower’s depressed financial results for 2008
and 2009 following the severe global economic downturn, none of the NEOs earned
the part of his or her incentive award based on the achievement of financial
objectives for either 2008 or 2009, accounting for 75% of the bonus, subject to
two limited exceptions. A similar decline in compensation occurred with respect
to the performance share units granted to NEOs in 2007 as a component of
Manpower’s long-term incentive program for them. As explained further below, the
payout under these performance share units was based on achievement of average
operating profit margin over a three-year period. To offer some
perspective, the target grant date value of the performance share units granted
in 2007 to the senior executives who received the awards and are still employed
by the Company was about $7,700,000, none of which was actually received because
of the Company’s financial results during the economic downturn. The CEO alone
experienced a loss of almost $4,500,000 in targeted value of compensation as a
result of not receiving an annual incentive based on financial metrics for 2009
or any benefit from the 2007 grants of performance share units.
Compensation
Elements
Manpower’s
guiding principles for the compensation of the Company’s executive management
team are implemented using various elements. The range of elements used is
intended to provide a compensation and benefits package that addresses the
competitive market for executive talent with the broad competencies and skills
described earlier, creates a strong incentive to maximize shareholder value,
produces outcomes that increase and decrease commensurate with Manpower’s
results, and is aligned with Manpower’s business strategies.
The
following are the main elements used by Manpower in its compensation
program:
Other
elements include:
Positioning
compensation against the market.> The Company’s practice is to
manage compensation generally to the median of compensation paid in the
competitive market for target results and to provide maximum remuneration
opportunities that approximate the 75th percentile of the competitive market for
outstanding results. For 2009, however, little attention was given to
the outstanding level opportunities because performance at even the target level
was virtually unobtainable due to the depressed economic
conditions. The Company’s approach to market positioning is not
strictly formulaic; some compensation levels or award opportunities may be above
or below these reference points. This approach is embodied in the design of the
annual incentive plan and the program of equity-based awards, as described
below. In setting each component of compensation, the Company takes into
consideration the allocation of awards in the competitive market between current
cash compensation and non-cash compensation including stock options, performance
share units and restricted stock or restricted stock units (i.e., long-term
compensation).
Determining the
competitive market.> In determining the competitive market,
Manpower employs three main sources: (1) an index of companies developed by
Mercer for its compensation research, (2) an industry-specific peer group, and
(3) position-specific published surveys.
Manpower’s
size and global reach relative to other companies in its industry make it
difficult to find relevant comparative data on performance and compensation.
Because the size and scope of their operations are smaller, the public companies
in the industry are not comparable to Manpower.
This
industry-specific peer group is as follows (which is now smaller, by two
companies, than the group used in connection with the 2008 compensation
decisions because of acquisitions):
Manpower
considers the compensation practices of these staffing
industry competitors in formulating the compensation packages for the
NEOs. However, the committee believes that the executive positions at
these companies are not comparable in scope and complexity to the NEO positions
at Manpower. For this reason, the committee does not believe that the
compensation levels
paid to executives at these companies provide a fair indicator of the
competitive market for Manpower’s NEOs.
In past
years, Manpower’s solution has been to look at a broad market peer group based
on factors that characterize Manpower’s profile: revenue, global reach,
cyclicality, complexity and low operating margins. However, for
purposes of the compensation decisions for 2009, the company substituted for
this broad market peer group an approach based on a Mercer core research group
of companies for developing comparative data. Mercer recommended
using this core research group because it was more similar in size to Manpower
based on revenues than the broad market peer group and to avoid the need to
modify the broad market peer group as changes occurred among specific peer group
companies.
This
research group has 150 companies with industry representation that mirrors the
Fortune 1000. Adapting the index for Manpower, companies with more
than $40 billion in revenues and less than $10 billion in revenues were filtered
out resulting in a broad market index of approximately 130 companies and a
median revenue of $20 billion. Manpower believes that using this index provides
a robust basis for assessing the competitive range of compensation for senior
executives of companies of Manpower’s size and complexity and represents a
better approach for this assessment than an approach based on the broad market
peer group previously used. A list of the companies that made up this
core research group in 2009 is attached as Appendix B.
In
addition to the above peer group data, Manpower considers data from compensation
surveys published by Mercer and other third-party data providers that are
recommended by Mercer as appropriate and credible sources of compensation data
for each NEO’s position. For the CEO and CFO, their positions were
typically compared to companies with revenues between $10 billion and $40
billion. For the executives who are the leaders of Manpower’s
business operating units, their positions are compared with U.S. compensation
survey data of similar sized groups and divisions. For executive
positions located outside of the U.S., Manpower also takes into account
international (regional and local) compensation survey data as a secondary
source in an effort to set compensation that is not only equitable among the
members of a global team but also competitive within the global markets where
Manpower competes for talent. However, this international data is not
included in the composite percentages shown below for these
positions.
The following table illustrates how the
total opportunity at target performance for total direct compensation for the
CEO and CFO for 2009 compared to the median compensation of executives in
similar positions taken from the core research group and from the U.S. survey
detail considered.
For the other
NEOs, the following table illustrates how the total opportunity at target
performance for total direct compensation for 2009 compared to the median
compensation of executives in similar position taken from the composite of the
core research group and U.S. survey data considered.
As
mentioned before, Manpower’s approach to market positioning is not strictly
formulaic and compensation levels fall above or below the median. For
the CEO, the committee determined that although his compensation was below the
median, the range of the CEO compensation market data is very narrow (for
example, there is only a $300,000 difference between the median and 75th
percentile for his salary), and therefore, his compensation was within a
suitable range of the median. For the CFO, the committee determined
that his long tenure with the Company, coupled with his significant financial
role and broader management role were reasons for which his target compensation
was set above the median compensation for the competitive market. In
addition, the committee determined that the targeted 2009 compensation for Mr.
Green and Ms. Gri should be slightly above the median of the competitive market
due to currency exchange rate conversions. Finally, with respect to
Mr. Sullivan, the committee determined that the competitive market information
should be adjusted to take into account Mr. Sullivan’s dual role in managing two
companies (Right Management and Jefferson Wells) and, accordingly, his
compensation was set above the median.
In 2009,
Manpower received critical comments from three shareholder advisory firms,
RiskMetrics Group, Glass Lewis & Co. and Proxy Governance, Inc.,
concerning the compensation of the CEO and other NEOs compared to company
financial performance. As indicated above, paying for results is a key element
of the Manpower’s compensation program and, as such, the unfavorable comments
were both a surprise and a concern to the company. Based on subsequent telephone
conversations between representatives of Manpower and Mercer with
representatives of certain of these firms, the firms acknowledged the validity
of our reasons for compensating the CEO and other NEOs as we
did. Manpower believes that a large part of the problem stems from
the comparator group being used by these firms to perform the analysis comparing
compensation to company performance. Manpower understands that one approach is
to select the comparator group based on GICS codes and size as measured by
revenues. Another firm uses four peer groups, which are not
disclosed, except that two are based on the industry and sub-industry sectors
using GICS codes, one is based on size (using enterprise value), and one is
based on zip codes. Unfortunately, most of Manpower’s GICS code peers are much
smaller from a revenue standpoint and do not have Manpower’s global reach. This
fact calls into question the validity of the performance and compensation
comparisons based on this approach to identifying an appropriate peer group.
Likewise, Manpower believes that using a peer group based on enterprise value or
zip codes distorts the comparison.
Assessing
individual factors.> An individual NEO’s total compensation or
any element of compensation may be adjusted upwards or downwards relative to the
competitive market based on a subjective consideration of the NEO’s experience,
potential, tenure and results (individual and relevant organizational results),
internal equity (which means that comparably positioned executives within
Manpower should have comparable award opportunities), the NEO’s historical
compensation, and any retention concerns. The committee uses a historical
compensation report to review the compensation and benefits provided to each NEO
in connection with its compensation decisions concerning that NEO.
Pay for results:
annual objective financial goals and operating objectives.> All of the
NEOs participate in the corporate senior management annual incentive plan, under
which the annual incentive component of their compensation arrangements is
provided. Consistent with Manpower’s pay for results philosophy, this plan
provides for annual incentive compensation awards that are tied to Manpower’s
financial results. Specifically, the plan provides for a variety of financial
metrics that are used in the determination of the amount of any annual
incentives earned by the NEOs. The incentive amounts are based on achievement of
pre-established goals using these metrics. The metrics include diluted earnings
per share (“EPS”) and economic profit (net operating profit after taxes less a
capital charge, referred to as “EP”) as well as other metrics as described
below.
In
addition, a portion of each NEO’s annual incentive award is based on
achievement, as approved by the committee, of operating objectives for the NEO
for the year. These objectives are typically tied to broad strategic or
operational initiatives.
For each
NEO, an award opportunity is assigned for achievement of each objective
financial goal applicable to the NEO and for achievement of the NEO’s operating
objectives, including the weighting of each such opportunity toward a total
award opportunity for the NEO. The annual incentive is calculated based on
actual results compared to the goals for results set forth for each
measure.
Each goal
has a performance range built around it with a commensurate increase or decrease
in the associated award opportunity as outcomes vary upwards or downwards. The
range of goals for results and associated award opportunities under the program
are expressed as “threshold,” “target” and “outstanding.” If results are below
threshold, no annual incentive is paid. If results exceed outstanding, the
annual incentive is capped at the outstanding award opportunity. A cap reduces
the likelihood of windfalls, makes the maximum cost of the plan predictable, and
helps ensure the plan is affordable.
The
financial metric of EPS is used in the determination of annual incentive awards
under the plan for all of the NEOs, as described below. The financial metric of
EP is used in addition to EPS in the determination of annual incentive awards
for the CEO and CFO. The Company fixes the target outcome for each of these
metrics at a number that reflects an annual growth target. This target is
generally based on the Company’s targeted long-term growth rate for EPS, but may
be adjusted year-by-year based on economic conditions and the Company’s expected
financial performance for the year. The target growth rate is then adjusted, to
set the threshold growth rate, for a level of performance that is below target
performance but still appropriate for some award to be earned, and, to set the
outstanding growth rate, to establish a level of performance at which it is
appropriate for the maximum incentive to be earned. So the comparisons are valid
between the two years, the growth rates are based on growth over results of the
previous year excluding non-recurring items, rather than actual growth. The EP
target amount is then determined based on the earnings growth reflected by the
EPS target and consideration of factors relating to the Company’s cost of
capital. The other financial metrics under the plan used in the determination of
annual incentives earned by the NEOs other than the CEO and the CFO, which are
described below, are determined in a similar way, taking into consideration the
economic conditions and expected financial performance of each individual
region, as well as the overall EPS and EP targets. To be clear, these targets
are not based on the Company’s financial plan for the year, but instead are
determined based on the separate methodology described above. As a result,
target performance for purposes of entitlement to an incentive award will not be
the same as performance at plan, which may be higher or lower than target
performance generally depending on economic conditions and trends at the
time.
Long-term equity
incentive awards. >Equity-based awards are used to focus NEOs
on long-term results and, together with deferred vesting of the right to receive
the award, as a retention incentive. The types of awards used by the committee
primarily have included stock options (generally vesting over a four-year
period) and performance share units (generally vesting at the end of a
three-year period) that are earned based on achievement of pre-established goals
for average operating profit margin over a three-year period. The determination
of these goals for the performance share units is based on the same methodology
described above under which long-term growth targets are used to determine the
goals. The Company believes that stock option grants provide an important
overall long-term incentive to NEOs to maximize the value of Manpower’s stock.
The Company uses performance share units to provide a more targeted
incentive, specifically using operating profit margin. The Company
believes that emphasizing operating profit margin in particular, among other
possible metrics, captures a key incentive to promote shareholder
value.
Process for
compensation determinations.> Compensation determinations for
the CEO and the CFO are made by the committee, subject to ratification by the
board of directors. These include determinations regarding the establishment and
achievement of the annual financial goals and operating objectives for the
annual incentives described above, any salary adjustments, and any equity-based
compensation awards. For the other NEOs, compensation determinations regarding
the establishment and achievement of the goals and objectives for the annual
incentive plan generally have been recommended by the CEO, with the final
determinations made by the committee. Salary determinations and equity-based
awards for the other NEOs are also made by the committee based on the
recommendations of the CEO.
CEO
and CFO determinations:
The
annual financial goals for the CEO and the CFO are based on the Company’s EPS
and EP for the year. The process for setting these goals for the CEO and CFO
begins with the collaboration between the CFO and Mercer. Mercer reviews the
outcome of this collaboration with the chairman of the committee and the
chairman makes a preliminary decision about the goals. The proposed goals
applicable to the CEO and the CFO are then reviewed by the full committee. In
connection with its review, the committee considers financial information
providing historical and projected earnings growth, the prior year financial
results, and the Company’s expected financial performance for the current year,
and consults with management, including financial personnel, and Mercer. Based
on this process, the committee ultimately determines the goals and the range of
award opportunities for achievement of the goals, including the weighting of
each goal, for the CEO and the CFO, subject to ratification by the board of
directors.
The
process for setting the annual operating objectives for the CEO and CFO begins
with the CEO, who recommends to the committee at the beginning of each year, the
objectives for both himself and the CFO for the year. The committee then reviews
these operating objectives in the context of Manpower’s strategic and financial
plans, and subject to any further adjustments, approves them.
After the
close of each year, a determination is made regarding the achievement by the CEO
and CFO of their goals and objectives for the year. The committee reviews and
approves a determination of the amount of the annual incentive award based on
achievement of the objective financial goals established by the committee for
each at the beginning of the year. The committee also reviews the CEO and CFO’s
performance and the achievement of the operating objectives for the year. Based
on this review, the committee makes a determination as to the amount of any
award for the year tied to achievement of these objectives for the CEO and CFO,
subject to ratification by the board of directors.
Equity
awards to the CEO and CFO, including applicable vesting schedules, are
determined by the committee and usually approved by the committee at its
regularly scheduled meeting in February of each year. The grant date of such
awards is the date the committee approves the grant. The exercise price of any
options granted is the closing price on the date of grant. The board of
directors must approve any grants to the CEO and the CFO.
As part
of the decision-making process on compensation matters affecting the CEO, the
committee meets in executive session without the CEO or other management
present. Likewise, when considering ratification of compensation matters for the
CEO, the board of directors meets in executive session.
Determinations
for NEOs other than the CEO and CFO:
The
process for setting the annual financial goals for the other NEOs begins with
the selection of the objective financial metrics to be used for a particular NEO
and the establishment by the CEO and the CFO of proposed goals for the NEOs
based on the selected metrics. The EPS metric is used for each NEO and the EPS
goals are the same as those used for the CEO and the CFO. The CEO and the CFO
determine the proposed goals and award opportunities for the NEO’s other
objective financial metrics. The committee then reviews the recommended
financial goals and makes any adjustments it deems appropriate, and then
approves the financial goals and the range of award opportunities for
achievement of the goals, including the weighting of each goal.
The
operating objectives for the other NEOs are established by the CEO at the
beginning of each year.
After the
close of each year, the committee reviews and approves a determination of the
amount of the annual incentive to each NEO for achievement of the NEO’s
objective financial goals. The CEO also makes a determination as to the amount
of any annual award based on achievement of the operating objectives for each
NEO and presents a recommended award for each NEO to the committee for its
review and approval.
Equity
awards to NEOs, including applicable vesting schedules, are determined by the
committee and usually approved by the committee at its regularly scheduled
meeting in February of each year. The CEO recommends to the committee the
individual grants for all NEOs other than himself. The committee reviews the
recommendations, makes any adjustments it deems appropriate, and makes the
grants. The committee may make grants to NEOs at other times during the year, as
it deems appropriate. The grant date of such awards is the date the committee
approves the grant, except the grant date for a new hire ordinarily is the date
of hire if such hire date is after the date of committee approval. The exercise
price of any options granted is the closing price on the date of
grant.
Components
of the 2009 Executive Compensation Program
The main
elements of the compensation program for 2009 for the Company’s NEOs, were a
base salary, an annual incentive award that varies in amount depending on the
level of achievement of pre-determined goals established for the executive, a
stock option grant, and a grant of restricted stock units. These
elements are discussed below.
Base
salary.> Generally, base salaries for NEOs are set near the median of base
salaries paid in the relevant competitive market for the particular position,
subject to adjustment in each case-based on individual factors as described
above. As a result of the competitive market and the complexity of the role, his
level of responsibility, and his overall impact on Manpower, the CEO’s base
salary is materially larger than the next highest paid NEO. There
were no increases to base salaries for the NEO’s in 2009. Also, the CEO, the
CFO, and other NEOs participated in a voluntary unpaid leave program that was
implemented by the Company during the year as a cost-saving measure during the
economic downturn, which reduced their base compensation by approximately 2 to
4%.
Base
salary levels affect the value of other compensation and benefit elements.
Specifically, because the annual incentive is awarded as a percentage of base
salary, a higher base salary will result in a higher annual incentive, assuming
the same level of achievement against goals. The value of the long-term
incentive awards is not determined as a multiple of base
salary. Instead, such awards are determined based on competitive
market data, individual performance, and other factors (see
below). Therefore, an increase in base salary does not result in an
increase in long-term incentive award levels. Finally, the level of severance
benefit each NEO may receive is increased if his or her base salary is
increased.
Annual incentives
for 2009 — CEO and
CFO.> As explained above, EPS and EP are the financial metrics under the
corporate senior management annual incentive plan that have been used, and which
were used again for 2009, for the annual incentive component of the compensation
arrangements for the CEO and the CFO.
The
Company believes that using EPS as a performance goal keeps the CEO and the CFO
focused on producing financial results that align with the interests of
shareholders. In this regard, Manpower is in a cyclical business, which is
influenced by economic and labor market cycles that are outside of Manpower’s
control, and it is important that the senior executives manage short-term
results closely to be able to adjust strategy and execution in quick response to
external cycle changes. The Company uses EP as a performance goal for the CEO
and CFO to provide an incentive for them to manage the business to produce
returns in excess of the Company’s cost of capital.
As
explained above, Manpower uses a methodology in setting the goal for target
performance under the annual plan that is based on the Company’s targeted
long-term growth rate. Accordingly, despite the depressed economic conditions,
EPS and EP were set based upon an EPS growth target of 12%. Corresponding to
this growth rate, the growth target for outstanding performance level was set at
25% based on an assessment ultimately made by the committee of what an
appropriate growth-rate target would be for outstanding performance. However,
because it was very unlikely that even target performance was attainable, the
committee determined to set the threshold target at a growth rate of -79.0%, in
order to make a limited award possible at the threshold level.
The
following table shows the EPS and EP goals established by the committee for
2009:
As
explained above, the operating objectives are tied to specific business
strategic goals. For 2009, the CEO and CFO had three operating objectives:
(1) develop a stronger platform for Manpower’s professional brand;
(2) achieve meaningful growth in our strategic clients around the world;
and (3) effectively manage the balance of investment and expense reduction.
These particular objectives were established by the committee based on the
recommendation of the CEO and the committee’s judgment that they were
appropriate in the context of the strategic and financial plan of
Manpower.
The CEO
and CFO total annual incentive award opportunity for 2009 was weighted 37.5% to
EPS, 37.5% to EP and 25% to the operating objectives. This is a change from
2008, where the weighting was 40% to EPS, 40% to EP and 20% to the operating
objectives. The reason for the change was to increase the amount of the overall
incentive opportunity tied to operating objectives in an effort to increase
focus on those specific goals in the economic environment existing during 2009.
For 2010, the weighting of the total annual incentive award opportunity is again
weighted 40% to EPS, 40% to EP and 20% to the operating
objectives. In establishing this weighting, committee members made
the judgment that under the current circumstances, there was no strong reason to
deviate from the 20% weighting of the operating objectives component that has
been the normal practice. Between the two objective financial metrics
of EPS and EP, the Company believes that both are equally important so both are
equally weighted. In addition, the committee set the award opportunities for the
CEO and the CFO for 2009 as follows: for the CEO, the incentive award payable
for target performance was 150% of base salary, for outstanding performance was
300% of base salary, and for threshold performance was 37.5% of base salary, and
for the CFO, the incentive award payable for target performance was 100% of base
salary, for outstanding performance was 200% of base salary, and for threshold
performance was 25% of base salary.
Accordingly,
the annual incentive payable to the CEO as a percentage of 2009 base salary for
achieving threshold, target or outstanding results for each measure was as
follows:
For the CFO,
the annual incentive payable as a percentage of base salary at threshold, target
or outstanding results for each measure was as follows:
The
committee considers the competitive market in designing its incentive award
levels in the manner described above. The committee also took into account the
committee’s objective of emphasizing results-based pay rather than fixed salary
in the Manpower compensation program. The CEO’s award opportunities are higher
than the opportunities for the CFO and other NEOs. In setting the CEO’s
compensation, the committee also took into account his broad role with final
accountability for Manpower’s global results.
The
determination of the extent to which the operating objectives have been achieved
is based on the committee’s subjective judgment regarding achievement and, where
applicable, on achievement of quantitative measures associated with an operating
objective. While the CEO provides the committee with his assessment of the
achievement of the operating objectives for the CEO and the CFO, the committee
makes its own assessment of the extent to which each operating objective was
achieved.
The
results for 2009 for the CEO and the CFO were as follows. Because actual results
for the year were below the threshold level performance goals for both EPS and
EP, no awards were earned for those financial objectives. The CEO and the CFO
did receive incentive awards for the year for achievement of the operating
objectives between the threshold and target levels. The committee
approved these awards based on the subjective judgment of committee members that
the operational objectives had been achieved at that level for the year. These
awards are shown in the Summary Compensation Table and are described in detail
in the narrative following the Grants of Plan-Based Awards Table
below.
For 2010,
EPS and EP have again been selected for the CEO and the CFO as the financial
metrics for the annual incentive component of their compensation arrangements
under the corporate senior management annual incentive plan. The reasons for
using these particular metrics, which again are equally weighted, are as
explained previously. In setting the EPS and EP performance goals for the year,
the same methodology based on Manpower’s targeted long-term growth rate,
adjusted based on then current economic conditions, was used. As mentioned
earlier, returning to the approach followed in 2008, the total annual incentive
award opportunity for 2010 was weighted 40% to EPS , 40% to EP and 20% to the
operating objectives.
Annual incentive
awards for 2009 – other NEOs.> The performance metrics used under the
corporate senior management annual incentive plan for the other NEOs for 2009
were EPS and Adjusted Operating Unit Profit (AOUP), which is defined as
operating unit profit less a capital charge for outstanding accounts receivable.
As stated above with respect to the CEO and the CFO, using EPS as a performance
goal is believed to keep the NEOs focused on producing financial results that
align with the interests of shareholders. On the other hand, Adjusted Operating
Unit Profit was selected as the other metric for NEOs under the annual plan to
encourage the other NEOs to increase profitability in their respective business
units.
The AOUP
goals for the NEOs for 2009 were as follows (in 000’s of USD):
The
target level for each goal was determined based on the same methodology as is
described above, under which the goal for target performance reflects the
company’s long-term growth targets, with the outstanding level based on an
assessment of what would constitute an appropriate outstanding growth target,
and with the threshold adjusted downward to reflect the challenge of achieving
target performance in the economic conditions then prevailing.
The
S&A/Gross Profit and Gross Profit Growth metrics that have been used in
previous years were not used for 2009. The CEO recommended, and the committee
approved, this approach on the basis that, in the depressed and volatile
economic environment then existing, goals based on these metrics did not offer
effective incentives.
The operating
objectives for the other NEOs for 2009 are summarized as follows:
These
particular objectives were selected by the CEO based on his judgment that they
promoted the strategic plan of Manpower on a company-wide basis and relative to
each NEO’s business unit.
The
annual incentive payable to the NEOs as a percentage of 2009 base salary for
achieving threshold, target or outstanding results for each measure of results
were as follows:
Barbara
J. Beck, Françoise Gri, Darryl Green and Jonas Prising
Owen
J. Sullivan
The
committee considers the competitive market in designing its incentive award
levels in the manner described above. In addition, the committee attempts to
offer similar levels of annual incentive opportunities (as a percentage of
salary) to NEOs with similar levels of responsibility at the
company.
None of
the other NEOs earned an incentive award for 2009 based on achievement of the
financial goals and award opportunities applicable to the NEO except for
Mr. Sullivan, who earned the maximum award with respect to the AOUP goal
for Right Management, and Mr. Green, who earned between the threshold and target
award with respect to the AOUP goal for Asia Pacific. The committee, based upon
the recommendation of the CEO, did approve incentive awards to each of the NEOs
that were determined to be appropriate based on the achievement of each NEO’s
operational objectives for the year. The total incentive awards are shown in the
Summary Compensation Table below and are described in detail in the narrative
following the Grants of Plan-Based Awards Table below.
Long-term
incentive awards for all NEOs for 2009.
The
committee awarded stock options and restricted stock units to the NEOs in 2009.
The restricted stock units vest ratably over three years beginning in 2010 and
are earned as long as the NEO continues to be employed by the Company. Although,
as discussed above, the Company normally uses performance share units as a
component of the long-term incentive, performance share units were not used for
2009. The reason was based on the belief that the depressed economic conditions
then prevailing, significantly diminished the usefulness of the award as an
effective incentive as it was difficult to forecast the direction and strength
of the economy and future demand for our services with any reasonable certainty
due to our industry’s sensitivity to economic factors. The use of stock options
and service-vested restricted stock units were judged to provide a better
long-term incentive with the appropriate balance of risk and
opportunity.
The
number of restricted stock units and options granted to each NEO are shown in
the Grants of Plan-Based Awards table below. In making decisions about the stock
options and restricted stock units to grant the NEOs, the committee takes into
account the competitive market data, individual and corporate/business unit
performance. Using these factors, a target value for incentive equity grants is
determined for each NEO. The allocation between the two forms of incentive for
2009 was determined based on the committee’s judgment that each should be
awarded approximately equal weight to obtain the appropriate incentive mix,
although putting slightly more emphasis on the overall incentive provided by
stock options.
For 2010,
the Company has again determined to include performance share units as a
component of long-term compensation, but restructured in design to reflect the
current circumstances. The performance share units granted for 2010 vest after
two years of service and are earned based on achievement of a pre-established
goal for improvement of operating profit margin for the first year and
maintaining the operating profit margin at or above the threshold level in the
second year. This approach is intended to put a heavy emphasis on the
incentive for near-term improvement in profit margins, reflecting the Company’s
objectives as the economic recovery progresses, coupled with a retention
incentive. The vesting percentage for threshold and outstanding
performance has also been increased for 2010, to 50% from 25% at the threshold
level and 200% from 175% at the outstanding level. In making this
change, the committee determined this was the appropriate level of earnings when
considering all elements of compensation for the NEOs.
Retirement
and Deferred Compensation Benefits
Career
shares.> Taking into consideration the lack of any active
company-sponsored pension plan at Manpower for the NEOs, the committee
selectively uses restricted stock that vests completely on a single date several
years into the future to provide a deferred compensation benefit as well as a
retention incentive. The committee considers each year whether to make any such
grants, to whom to make such grants and the size of such grants. The committee
makes these determinations by taking into account what is most appropriate for
an NEO in view of the retention incentive provided by the award and the
perceived need to supplement the NEO’s deferred compensation benefits. In 2009,
career shares were granted to Ms. Beck, Ms. Gri, Mr. Green and Mr. Prising and
vest in 2013. No career shares were granted in 2010.
Nonqualified
deferred compensation plan>. Manpower
maintains tax-qualified 401(k) plans for its U.S. employees. For compliance
reasons, once an executive is deemed to be “highly compensated” within the
meaning of Section 414(q) of the Internal Revenue Code, the executive is no
longer eligible to participate in Manpower’s 401(k) plans. Manpower maintains a
separate non-qualified savings plan for eligible executives, providing
comparable benefits to those provided to 401(k) plan participants although not
as favorable for tax purposes as a qualified plan, including compensation
deferrals and matching and profit-sharing contributions. The committee maintains
this program in an effort to provide NEOs with reasonably competitive benefits
to those in the competitive market.
Other
Benefits
NEOs
participate in the health and dental coverage, company-paid term life insurance,
disability insurance, paid time off, and paid holiday programs applicable to
other employees in their locality. These rewards are designed to be competitive
with overall market practices, while keeping them at a reasonable level. The
benefits are in place to attract and retain the talent needed in the
business.
Manpower
sponsors an employee stock purchase plan allowing employees to purchase common
stock at a discount. The plan is broad-based and available to all U.S.
employees, including qualifying temporary employees, and employees in certain
other countries. This plan was suspended for all employees in 2009 due to the
current economic conditions because the cost of the plan for the Company far
outweighed the benefit received by the employees. The plan was reinstituted in
2010 with slight changes to the plan to balance the cost to the Company with the
benefit received by the employees. None of the NEOs currently participate in
this plan. Manpower reimburses NEOs for financial planning assistance. This
benefit is provided to ensure that executives prepare adequately for retirement,
file their taxes and conduct all stock transactions appropriately. In
addition, Manpower provides memberships in clubs for business entertaining to a
limited number of executives. Each executive who is provided such a
membership pays the expenses for any personal use of these clubs, however, none
of the NEOs used these clubs for personal use in 2009. Manpower also
maintains a broad-based auto program that covers approximately 163 management
employees in the U.S., including the U.S.-based NEOs. Pursuant to this program,
Manpower pays 75% of the cost of a leased car for the NEOs based in the U.S.
Consistent with local practice in France and Japan, Manpower provides
Ms. Gri with a company car and Mr. Green with a car allowance. All of
these car programs are an integral part of Manpower’s benefit package and are
viewed as a high value benefit by the NEOs.
Except in
connection with expatriate assignments, as discussed below, Manpower does not
pay tax gross ups to its NEOs on any of the above benefits.
Severance
Arrangements
Manpower
has entered into severance agreements (which include change of control benefits)
with each of the NEOs. The committee believes that severance and change of
control policies are an essential component of the executive compensation
program and are necessary to attract and retain senior talent in a competitive
market. The committee also believes that such agreements benefit Manpower by
clarifying the terms of employment and by protecting Manpower’s business through
non-competition, non-solicitation and non-disclosure provisions. Furthermore,
the committee believes that change of control benefits, if structured
appropriately, serve to minimize the distraction caused by a potential
transaction and reduce the risk that key talent would leave the organization
before a transaction closes. This outcome can reduce the value of the
organization to a buyer or to the shareholders if a transaction fails to
close.
The
severance agreements provide benefits to the NEOs in the event of certain
terminations, such as involuntary terminations not for “cause” or voluntary
terminations for “good reason.” Cause is defined in the severance
agreements, and generally includes: performance failures, failure to follow
instructions, fraudulent acts, violation of Manpower policies, acts of moral
turpitude which are likely to result in loss of business, reputation or goodwill
to Manpower, chronic absences from work which are non-health related, crimes
related to the NEO’s duties, or willful harmful conduct to
Manpower. Good reason is also defined in each severance agreement,
and generally includes: a material reduction in the NEO’s duties, a material
reduction in the NEO’s base salary or incentive bonus opportunity, or a
relocation to a new principal office that is in excess of 50 miles from the
NEO’s prior principal office. The amount of the benefits under the
agreements is enhanced if the termination is associated with a change of
control. However, there also must be a termination of the NEO’s employment (a
“double trigger”) in order for the NEO to receive the enhanced benefits upon a
change of control. Each NEO’s potential severance benefit is affected by the
level of his or her base salary and annual incentive opportunity.
The
committee has chosen these events as triggering a payment because they involve
an involuntary termination or constructive termination that did not arise from a
failure to perform or misconduct and that, in the absence of the agreement,
could result in the loss of substantial benefits that the NEO would otherwise
have earned. Furthermore, the committee recognizes that even in a competitive
market for executive talent, the number of comparable positions at comparable
companies is limited and finding a replacement position following an involuntary
termination may take a substantial amount of time.
The
committee believes it is appropriate to have such agreements, provided the
agreements have a limited term and are periodically subject to renewal and
approval by the committee and the board of directors. The committee periodically
reviews the benefits provided under the agreements to ensure that they serve
Manpower’s interests in retaining key executives, are consistent with market
practice and are reasonable. When conducting this review, the committee includes
an assessment of the total value of benefits that would accrue to each executive
under the various applicable severance scenarios. In February 2008,
the committee conducted a review of the severance agreements entered into
between Manpower and each of the NEOs. This review resulted in the
committee making certain changes to the severance agreements that were entered
into between Manpower and each of the CEO and the CFO in February 2008, as
compared to the form of severance agreement which had been used by Manpower in
prior years. Manpower entered into new agreements with Mr. Prising,
Ms. Beck and Mr. Sullivan in November 2009. These new agreements
replaced the prior agreements that had expired in May 2009 for Mr. Prising and
Ms. Beck and in September 2009 for Mr. Sullivan. With the exception
of their new term, these new agreements are in substantially the same form as
the agreements they replaced. All other NEOs remain subject to the
same agreements that the committee had most recently reviewed in
2008.
Additional
Executive Compensation Policies
Stock ownership
guidelines.> The committee believes that NEOs and other senior
executives should hold a meaningful stake in Manpower to align their economic
interests with those of the shareholders. To that end, the committee adopted
stock ownership guidelines that are based on the stock price and base salary in
effect on December 31, 2005. The committee has set a goal of five years for
these senior executives to attain the targeted ownership levels. In determining
whether targeted ownership levels have been met, the committee only takes into
account actual shares owned and vested stock options and does not consider any
unvested restricted stock, unvested stock options, outstanding performance share
units or unvested restricted stock units held by the NEOs. The committee
reviewed these guidelines in 2009 and did not make any changes to the
guidelines. As indicated in the following table, as of December 31, 2009,
each of the NEOs had met these guidelines, except for Ms. Gri and
Mr. Green, both of whom were more recently hired.
Manpower
has also adopted a policy to prohibit designated individuals, including the
NEOs, from engaging in short-selling of Manpower securities and buying and
selling puts and calls on Manpower securities without advance approval. To date,
no designated individual has requested approval to engage in such a
transaction.
Expatriate
policies.> As a result of being a global company, Manpower may
need at times to assign its executives outside of their home country. Also,
Manpower’s executive development strategy includes providing its executives the
opportunity to acquire management experience outside of their home country. This
experience is essential to developing executives who can lead within a global
company. To facilitate this strategy and to induce the executives to make such a
change, Manpower provides expatriate benefits, which eliminate any tax
disadvantages caused by a relocation and compensate them for the disruption it
causes to them and to their families.
Mr. Prising
is provided certain benefits in connection with his assignment to the U.S. to
lead Manpower’s North American operations. The assignment agreement provides for
benefits related to Mr. Prising’s relocation, including eligibility to
participate in an automobile program, payment or reimbursement for housing,
tuition, tax preparation, moving and return visit expenses, and tax equalization
and tax gross up payments. The initial term of Mr. Prising’s assignment was
three years, but the term was extended for an additional two years in December
of 2008, extending such benefits until the end of 2010. Mr. Green also has
similar benefits associated with his position leading Manpower’s Asia-Pacific
operations, although there is no fixed term for Mr. Green’s
agreement.
Other
Material Tax Implications of the Executive Compensation Program
Tax implications
for Manpower. >Section 162(m) of the Internal Revenue Code
generally disallows a tax deduction to public corporations for compensation over
$1,000,000 for any fiscal year paid to the corporation’s CEO and three most
highly compensated executive officers (other than the CEO and CFO) in service as
of the end of any fiscal year. However, Section 162(m) also provides that
qualifying performance-based compensation will not be subject to the deduction
limit if certain requirements are met. Where necessary for covered executives,
the committee generally seeks to structure compensation amounts and plans that
meet the requirements for deductibility under this provision. Specifically, the
committee has taken steps to qualify the stock option awards, performance share
unit awards and the financial components of awards under the Corporate Senior
Management Annual Incentive Plan as performance-based compensation for this
purpose. However, the committee may implement compensation arrangements that do
not satisfy these requirements for deductibility if it determines that such
arrangements are appropriate under the circumstances. In addition, because of
uncertainties as to the application and interpretation of Section 162(m)
and the regulations issued thereunder, the committee cannot assure that
compensation intended by the committee to satisfy the requirements for
deductibility under Section 162(m) will in fact be deductible.
Tax implications
for NEOs. >The committee generally seeks to structure
compensation amounts and arrangements so that they do not result in penalties
for the NEOs under the Internal Revenue Code. For example, Section 409A
imposes substantial penalties and results in the loss of any tax deferral for
nonqualified deferred compensation that does not meet the requirements of that
section. The committee has structured the elements of Manpower’s compensation
program so that they are either not characterized as nonqualified deferred
compensation under Section 409A or meet the distribution, timing and other
requirements of Section 409A. Without these steps, certain elements of
compensation could result in substantial tax liability for the NEOs.
Section 280G and related provisions impose substantial excise taxes on
so-called “excess parachute payments” payable to certain executives upon a
change of control and results in the loss of the compensation deduction for such
payments by the executive’s employer. The committee has structured the change of
control payments under its severance agreements with the CEO and CFO to include
a gross up for excise taxes imposed under Section 280G in order to preserve
the after-tax value of those payments for those executives. For other NEOs, the
change of control payments have been structured to limit the amount of the
severance payment in the event that the severance payment will be subject to
excise taxes imposed under Section 280G, but only where the after-tax
amount received by the NEO would be greater than the after-tax amount without
regard to such limitation.
REPORT
OF THE EXECUTIVE COMPENSATION AND HUMAN RESOURCES COMMITTEE OF THE BOARD OF
DIRECTORS
The
executive compensation and human resources committee of the board of directors
of Manpower has reviewed and discussed with management the Compensation
Discussion and Analysis included in this annual report. Based on this
review and discussion, the executive compensation and human resources committee
recommended to the board of directors that the Compensation Discussion and
Analysis be included in this annual report.
The
Executive Compensation and Human Resources Committee
J. Thomas
Bouchard, Chairman
Marc J.
Bolland
Cari M.
Dominguez
Jack M.
Greenberg
EXECUTIVE
COMPENSATION AND HUMAN RESOURCES COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
No member
of the executive compensation and human resources committee has ever been an
officer or employee of Manpower or any of our subsidiaries and none of our
executive officers has served on the compensation committee or board of
directors of any company of which any of our other directors is an executive
officer.
Compensation
Policies and Practices as they Relate to Risk Management
Members
of the Company’s senior management team have considered and discussed the
Company’s compensation policies and practices and specifically whether these
policies and practices create risks that are reasonably likely to have a
material adverse effect to Manpower. Management has also discussed
this issue with the executive compensation and human resources committee and
have determined there are no risks arising from our compensation policies and
practices that are reasonably likely to have a material adverse effect on
Manpower.
As
Manpower is located in various countries around the world, we have several
incentive plans. Our plans use various financial performance growth
metrics, generally relating to profitability. As a result, there is
no common incentive driving behavior. We also have controls in place
that mitigate any impact these plans might have on us. In general,
each of our incentive plans has a threshold, target and outstanding payout
level, which is not material to the Company, that is earned based on the results
of the financial metrics. In addition, there is an approval process
of the various incentive plans in each country, which are approved by the
country manager and financial manager in the respective country to ensure the
growth metrics are based on company performance. In addition,
incentives are generally not a major portion of an individual’s salary, other
than our executives officers, which participate in the corporate senior
management plan described below.
Our
largest and most significant incentive plan is the corporate senior management
annual incentive plan, which is the plan in which our executive officers
participate. The executive compensation and human resources committee
has general oversight of this plan and has capped the incentive payouts at an
outstanding level to ensure that no employee receives a bonus that is
significant enough to create a significant risk to the Company. In
addition, the financial metrics, which focus on company-wide and segment-wide
goals and objectives, and results of those metrics used in this plan, are
reviewed and approved at multiple levels in the Company.
Based on
the above factors, we do not believe our compensation policies and practices
create risks that are reasonably likely to have a material adverse effect on
Manpower .
The following
table summarizes compensation information for Manpower’s CEO, CFO, the three
most highly compensated executive officers, and the two other executive officers
who are business unit leaders. For purposes of providing consistent compensation
disclosure year to year, we have included summary compensation information for
our CEO and CFO and for all of our executive officers
who are business unit leaders (rather than the three most highly compensated
executive officers other than the CEO and CFO), as the individuals comprising
such group may change from year to year based on changes in total compensation.
We refer to this group of seven executive officers as the named executive
officers (“NEOs”).
Summary
Compensation Table
For
restricted stock or restricted stock units: For 2008 – Mr. Joerres — $2,265,600 of
career shares in the form of restricted stock. For 2007 – Mr.
Sullivan —
$190,750 of career shares in the form of restricted stock; Mr. Prising — $190,750 for
career shares in the form of restricted stock; and Mr. Green — $932,400 of
restricted stock units.
The
performance share units in both 2008 and 2007 are reported at the target level,
which we believe was the probable outcome of the performance conditions at the
time of grant. The amount included at target level for each NEO
was:
For 2008
- Mr. Joerres — $3,681,600; Mr.
Van Handel —
$1,416,000; Ms. Beck — $396,480; Mr.
Sullivan —
$311,520; Mr. Prising — $339,840; Mr.
Green —
$339,840; and Ms. Gri —
$396,480.
At the
outstanding level, the grant date fair value of the performance share units
would have been:
For 2008
- Mr. Joerres — $6,442,800; Mr.
Van Handel —
$2,478,000; Ms. Beck — $693,840; Mr.
Sullivan —
$545,160; Mr. Prising — $594,720; Mr.
Green —
$594,720; and Ms. Gri —
$693,840.
All
Other Compensation in 2009
Grants
of Plan-Based Awards in 2009
Compensation
Agreements and Arrangements
Manpower
entered into compensation agreements and severance agreements with the CEO and
the CFO in February 2008 that replaced their prior agreements, which were set to
expire. The term under each of the compensation agreements and severance
agreements expires on the first to occur of (1) the date two years after
the occurrence of a change of control of Manpower or (2) February 20,
2011, if no such change of control occurs before February 20, 2011. The
severance agreements with the CEO and the CFO are described in further detail in
the section entitled “Termination of Employment and Change of Control
Arrangements” following the Nonqualified Deferred Compensation Table. Under the
compensation agreements, the CEO and the CFO are entitled to receive a base
salary, as may be increased from time to time by Manpower, and each is entitled
to receive incentive compensation in accordance with an annual incentive plan
approved and administered by the executive compensation and human resources
committee. The CEO is entitled to receive an annual base salary of at least
$1,000,000 per year, and the CFO is entitled to receive an annual base salary of
at least $550,000 per year. The annual incentive plan for the CEO and the CFO is
described in further detail in the Compensation Discussion and Analysis included
in this annual report.
In
addition, the CEO and CFO are eligible for all benefits generally available to
the senior executives of Manpower, subject to and on a basis consistent with the
terms, conditions and overall administration of such benefits. The compensation
agreements also contain nondisclosure provisions that are effective during the
term of the executive’s employment with Manpower and during the two-year period
following the termination of the executive’s employment with Manpower, and
nonsolicitation provisions that are effective during the term of the executive’s
employment with Manpower and during the one-year period following the
termination of the executive’s employment with Manpower.
Ms. Beck,
Mr. Sullivan, Mr. Prising, Mr. Green and Ms. Gri currently
receive an annual incentive bonus determined pursuant to an incentive
arrangement with Manpower and have entered into severance agreements with
Manpower. The annual incentive bonus arrangements are described in further
detail in the Compensation Discussion and Analysis included in this annual
report and the severance agreements for each NEO are described in further
detail in the section entitled “Termination of Employment and Change of Control
Arrangements” following the Nonqualified Deferred Compensation
Table.
During
2009, Mr. Prising received expatriate benefits in connection with his
assignment to Milwaukee, Wisconsin. This arrangement is described in further
detail in the Compensation Discussion and Analysis included in this annual
report.
In
connection with his employment as President, Asia Pacific Operations, Manpower
entered into an agreement with Mr. Green to provide for benefits related to
Mr. Green’s appointment in Japan, including a car allowance, payment or
reimbursement for housing, tuition, tax preparation, moving and return visit
expenses, tax gross ups on these expenses and tax equalization
payments.
In
connection with her appointment as President of Manpower France SAS,
Ms. Gri entered into an employment agreement with Manpower France Holdings
SAS. Under her employment agreement, she is entitled to receive an annual base
salary of €400,000, as may be increased from time to time, and she is entitled
to receive annual incentive compensation. In addition, under her employment
contract, Ms. Gri is entitled to reimbursement of her business expenses, a
company car, and a limited number of vacation days. Her employment agreement
also contains nondisclosure provisions that are effective during the term of her
employment with Manpower and following the termination of her employment with
Manpower.
2009
Annual Incentive Awards
The following
tables illustrate the achievement of the performance targets in relation to the
payment of the 2009 Annual Incentive Awards.
For 2009,
Manpower’s EPS was $0.45 (compared to $1.00 at threshold, $5.32 at target and
$5.94 at outstanding) and EP was -$203.5
MM (compared to -$195 MM at threshold, $135 MM at target and $175 MM at
outstanding).
Jeffrey
A. Joerres — 2009 Annual Incentive Calculation
Jonas
Prising — 2009 Annual Incentive Calculation
Grants
Under the 2003 Equity Incentive Plan
Performance share
units. Manpower did not make any grants of performance share
units in 2009.
Career
shares>. Manpower made a
grant of career shares to Ms. Beck, Mr. Green, Ms. Gri and Mr. Prising in
February 2009, which was granted as restricted stock units with a four-year
vesting term. Dividend equivalents are paid on the restricted stock units under
these awards. Additional vesting terms applicable to these grants are described
in further detail in the section entitled “Termination of Employment and Change
of Control Arrangements” following the Nonqualified Deferred Compensation
Table.
Outstanding
Equity Awards at December 31, 2009
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