This excerpt taken from the BPOP DEF 14A filed Mar 13, 2009.
Base salaries are generally designed to be competitive with comparable positions in peer group companies in order to attract and retain executives. Base salaries vary based on the Compensation Committees assessment of the NEOs qualifications, experience, responsibilities, leadership potential, individual goals, performance and competitive pay practices. Base salaries are reviewed annually, but are not necessarily increased.
In January 2008, the Compensation Committee reviewed NEO base salaries and increased the base salaries of NEOs, other than the CEO, as shown in the table below. The CEOs base salary was not increased. The Compensation Committee determined that such increases were warranted in order to remain competitive and recognize the evolution of the leadership roles in recent years.
While market survey data showed that since 2005 top executive base pay increased an average of approximately 5% annually, the Corporations NEOs remained at reduced salary levels as a result of a base salary reduction that they accepted in 2006 which remained unchanged in 2007. The 2008 base pay adjustments granted by the Compensation Committee to the NEOs, other than the CEO, sought to restore the reductions that had been in effect since January 2006.
In the case of Mr. Jordán and Ms. Santos de Álvarez, the Compensation Committee incorporated a base pay adjustment to maintain base pay competitiveness with comparable positions at the Corporations peer institutions. In approving the base pay increases, the Committee also took into consideration the evolution of their roles during the past five years in terms of increasing responsibility, complexity and regulatory impact. Mr. Villamils base pay adjustment recognized the increase in size, scope and profitability of EVERTEC since its inception in 2004. Mr. Negrón assumed his current position effective April 1, 2008 and his compensation was set as described below.
As an important part of the actions taken in February 2009 to generate cost savings due to the deteriorating economic crisis and the Corporations financial results, the Compensation Committee approved a 10% reduction in base salary for Mr. Chafey (Chief Operating Officer) and a 7.5% reduction in base salary for the other NEOs, effective March 2009. A base salary reduction of 10% for Mr. Carrión has been in effect since 2005. Base pay reductions were also implemented for 73 other executives of the Corporation.
The following table illustrates these changes: