MWV » Topics » Compensation Philosophy

This excerpt taken from the MWV DEF 14A filed Mar 22, 2006.

Compensation Philosophy

MeadWestvaco’s executive compensation programs are designed to give executives strong incentives to achieve the company’s strategic business objectives thus increasing the company’s value for its stockholders over the long term. In addition to the achievement of key financial and operating metrics, the Committee considers an individual executive’s contribution to the execution of corporate strategies as critically important to its evaluation of an executive’s performance and, relies heavily on this criterion in its review and approval of salaries and cash and equity awards. The company also views its compensation programs as critical tools to recruit and retain key executive talent. Guided by principles that reinforce the company’s pay-for-performance philosophy, compensation generally includes a base salary and eligibility for annual and long-term incentives paid in cash and equity. The Committee believes that the company’s compensation program for senior executives must reflect a focus on sustained operational excellence that rewards competitive long-term financial results. The company’s pay-for-performance philosophy is designed by establishing and then evaluating actual performance relative to key financial performance goals, which are discussed in more detail below. The Committee’s role is to ensure that the company’s compensation philosophy is aligned with these performance goals.

 

Prior to 2004, a significant portion of the company’s long-term incentive compensation for the Leadership Team was paid in the form of cash. In 2004, the Committee initiated a re-design of the company’s long-term incentive compensation program to place greater emphasis on equity awards. The changes over the last two years reflect the Committee’s philosophy that long-term incentive compensation should serve to align the interests of executives with those of MeadWestvaco’s shareholders (through stock option awards), promote long-term performance goals (through performance based awards of restricted stock or stock units) and further executive retention (through service based awards of restricted stock or stock units). In 2005, the Committee authorized an equity award approach for the Leadership Team that is intended to deliver long-term incentive compensation primarily in the form of performance based restricted stock and stock options. These design changes insure that the ultimate payment and delivery of long-term compensation occurs only if the company’s financial performance improves as measured by identifiable objective performance metrics.

 

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This excerpt taken from the MWV DEF 14A filed Mar 23, 2005.

Compensation Philosophy

MeadWestvaco’s executive compensation programs are designed to give executives strong incentives to achieve the company’s strategic business objectives thereby increasing the value of the company for its stockholders over the long term. The contribution of an individual to the execution of corporate strategies, and to the pursuit of these objectives, continues to be a principal basis upon which the Committee evaluates executive job performance and, therefore, is a significant factor in determining salaries, incentive awards, and equity grants. The company also views its compensation programs as critical tools to recruit and retain key executive talent. Guided by principles that reinforce the company’s pay-for-performance philosophy, compensation generally includes a base salary, eligibility for annual and long-term incentives paid in cash, as well as equity-based compensation. The Committee believes that a significant portion of its senior executives’ compensation must reflect a focus on sustained operational excellence, reward competitive long-term financial results, and be linked to the returns realized by stockholders. The company’s pay-for-performance philosophy is designed by establishing and then evaluating actual performance relative to key performance goals. These goals are discussed in more detail below under “Cash Compensation.” The Committee’s role is to ensure that the company’s compensation philosophy is aligned with these performance goals.

 

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