Send us Feedback

SLM (JSM)
Analysis
SUMMARY
BULLS
BEARS
TOPICS
Data
DATA CENTRAL
STOCK CHART
Financials
SEC FILINGS
BALANCE
INCOME
CASH FLOW

SLM » Topics » How does each element of pay and the Corporations decision regarding that element of pay fit into the Corporations overall compensation objectives and affect decisions regarding other elements?

This excerpt taken from the SLM DEF 14A filed Apr 9, 2007.
How does each element of pay and the Corporation’s decision regarding that element of pay fit into the Corporation’s overall compensation objectives and affect decisions regarding other elements?
 
Seven elements of pay comprise the executive compensation program. How each element fits into the Corporation’s overall compensation objectives and how each element relates to other elements is described below.
 
  •     Base salaries:  Base salaries fit the compensation program objective of providing competitive pay as well as motivating and rewarding performance. Decisions about base salaries have an impact on the amount of retirement and cash severance benefits due to the NEOs because retirement and cash severance benefits are calculated by reference to base salaries. Since retirement and cash severance benefits are not significant in amount, the Committee does


16

 

  not re-visit the retirement and cash severance benefit programs each time base salaries are adjusted.
 
  •     Annual performance bonuses:  Annual performance bonuses fit the objective of pay for performance. Like base salaries, annual performance bonuses impact retirement and cash severance benefits. Since retirement and cash severance benefits are not significant in amount, the Committee does not re-visit these benefits each time annual performance bonuses are awarded.
 
  •     Equity awards:  Equity awards fit the objective of pay for performance. Equity awards do not impact retirement benefits. Equity awards vest upon certain termination of employment events, as explained in the Potential Payments upon Termination or Change in Control section in this proxy statement. Otherwise, unvested equity awards do not vest upon retirement.
 
  •     Retirement benefits:  Retirement benefits fit the objectives of providing competitive compensation and recognizing tenure. The Corporation does not emphasize retirement benefits. The retirement program was most recently reviewed by the Committee in May 2004, when the decision was made to discontinue benefit accruals under the defined benefit retirement program on a phased-out basis, with the final phase-out set for July 1, 2009. At the same time, the Committee decided to increase from six to eight percent the maximum corporate contribution to the Corporation’s defined contribution savings program. The Corporation’s decision to end the accrual of benefits under the defined benefit retirement program is consistent with the compensation program’s lack of emphasis on risk-free or safety-net pay.
 
  •     Severance benefits:  Severance benefits are tied to equity awards, base salary and annual performance bonuses. The change in control severance plan meets the objective of retaining executives through the negotiation and implementation of a change in ownership of the Corporation. Mr. Fitzpatrick’s severance arrangement also met the goal of securing his services as CEO in 2005, when his employment agreement was negotiated.
 
  •     Opportunity to defer compensation:  This benefit meets the objective of providing competitive compensation. The deferred compensation plan relates to other elements of pay in that base salary, annual performance bonuses and performance stock may be deferred. The plan is considered a tax-planning strategy for executives, not a benefit provided by the Corporation. The Corporation does not make contributions to the deferred compensation plan or pay “above market” rates of return. The compensation expense of investment earnings that accrue under the plan is offset by a hedging investment strategy.
 
  •     Non-cash benefits:  Non-cash benefits fit the objective of providing competitive compensation. Decisions about non-cash benefits do not impact other pay.
 
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki