TSYS » Topics » The Objectives of our Executive Compensation Program

This excerpt taken from the TSYS DEF 14A filed Apr 30, 2009.
The Objectives of our Executive Compensation Program
 
We use the following principles to guide our decisions regarding executive compensation:
 
Provide compensation opportunities competitive with market levels.
 
To attract and retain executives with the ability and the experience necessary to lead us and deliver strong performance to our stockholders, we strive to provide a total compensation package that is competitive with total compensation provided by our industry peer group, which we construct to include the following companies:
 
     

•   Neustar , Inc. 
 
•   Sybase, Inc.
•   NCI Inc. 
 
•   Globecomm Systems, Inc.
•   Comverse Technology, Inc. 
 
•   ViaSat, Inc.
•   Openwave Systems, Inc. 
 
•   Syniverse Holdings, Inc.
   
•   Comtech Telecommunications Corp.
 
We chose these companies because they are publicly traded companies in the commercial and technology sectors in which we operate and/or they are close to our size in terms of revenue and market capitalization. We believe that such companies provide an appropriate peer group because they consist of similar organizations against whom we compete for executive talent. We annually review the companies in our peer group and add or remove companies as necessary to insure that our peer group comparisons are meaningful. We changed our peer group slightly from the one used in 2007 by adding Comtech Telecommunications Corp. because its mobile communications systems and satellite services business lines are comparable to our Government Segment business. We used this same peer group when constructing the “performance graph” that appears in our Annual Report.
 
For each Named Executive Officer, we consider the relevance of data of our peer group, considering:
 
  •  Our business need for the Named Executive Officer’s skills;
 
  •  The contributions that the Named Executive Officer has made or we believe will make to our success;
 
  •  The transferability of the Named Executive Officer’s managerial skills to other potential employers;
 
  •  The relevance of the Named Executive Officer’s experience to other potential employers, particularly in the telecommunications technology industry; and
 
  •  The readiness of the Named Executive Officer to assume a more significant role with another potential employer.
 
Base Salaries
 
We target base salaries to approximate the market median (50th percentile) for our peer group. To arrive at the 50th percentile for the base salaries of our Named Executive Officers, we consider the median of the data gathered from proxy statements for the positions of the Named Executive Officers in relation to the Named Executive Officers of our peer group for each position. We also use data from publicly available surveys, when available, in addition to our peer group, in order to have a more complete overview of the competitive market for our executive talent.
 
Cash Incentives
 
Incentive award opportunities are targeted to result in Bonus Opportunity Plan payments equal to the market median of cash incentives paid by our peer group assuming our target business objectives are achieved.
 
Long-Term Equity Compensation
 
Annual equity grants are targeted at 75 percent of the median level of market practices for the Named Executive Officer, but may be adjusted in the discretion of the Compensation Committee based on individual performance or other factors. The allocation between long-term and currently paid out compensation reflects


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consideration of how our peer companies use long-term and currently paid compensation to pay their Named Executive Officers because we feel it is important to maintain parity with competitors for our management team.
 
Total Compensation
 
Total compensation is targeted at the 75th percentile of our peer group, considering individual performance and experience. The targets for compensation are set at the beginning of each fiscal year. The Company’s outstanding operational performance achieved in fiscal year 2008 resulted in the Named Executive Officers earning total compensation which significantly exceeded the targeted compensation set forth at the beginning of the year.
 
Require performance goals to be achieved in order for the majority of the target pay levels to be earned.
 
Our executive compensation program emphasizes pay for performance. Performance is measured based on achievement of company and individual performance goals that are aligned with our business strategy and are approved by our Compensation Committee relative to the annual business plan as approved by the Board of Directors. If the target level for the performance goals is exceeded, executives have an opportunity to earn cash incentive awards above the median of the market of our peer group pursuant to our Bonus Opportunity Plan. If the target levels for the performance goals are not achieved, executives may earn less or no Bonus Opportunity Plan payments.
 
Offer a comprehensive benefits package to all full-time employees.
 
We provide a competitive benefits package to all full-time employees which includes health and welfare benefits, such as medical, dental, vision care, disability insurance, life insurance benefits, and a 401(k) savings plan. We have no structured executive perquisite benefits (e.g., club memberships or company vehicles) for any executive officer, including the Named Executive Officers, and we currently do not provide any supplemental pensions to any executive officer, including the Named Executive Officers. In December 2008 the Compensation Committee adopted a Deferred Compensation Plan under which certain highly compensated employees, including the Named Executive Officers, are allowed to defer receipt of current income until some future period, which period must be determined prior to making contributions. The Company also may contribute compensation on behalf of an employee, including a Named Executive Officer, which will vest to the beneficiary employee at the pre-determined future date.
 
Provide fair and equitable compensation.
 
We provide a total compensation program that we believe will be perceived by both our Named Executive Officers and our stockholders as fair and equitable. In addition to conducting analyses of market pay levels and considering individual circumstances related to each Named Executive Officer, we also consider the pay of each Named Executive Officer relative to each other Named Executive Officer and relative to other members of the management team. We have designed the total compensation programs to be consistent for our executive management team.
 
This excerpt taken from the TSYS DEF 14A filed Apr 29, 2008.
The Objectives of our Executive Compensation Program
 
We use the following principles to guide our decisions regarding executive compensation:
 
Provide compensation opportunities competitive with market levels.
 
To attract and retain executives with the ability and the experience necessary to lead us and deliver strong performance to our shareholders, we strive to provide a total compensation package that is competitive with total compensation provided by our industry peer group, which we construct with the following companies:
 
     
• Neustar
 
• Sybase
• NCI Information Systems
  • Globecomm Systems
• Comverse Technology
  • ViaSat
• Openwave Systems
  • Syniverse Technologies
 
We chose these companies because they are publicly traded companies in the commercial and technology sectors in which we operate and they are close to our size in terms of revenue and market capitalization. We believe that such companies provide an appropriate peer group because they consist of similar organizations against whom we compete for executive talent. We annually review the companies in our peer group and add or remove companies as necessary to insure that our peer group comparisons are meaningful. We changed our peer group slightly from the one used in 2006 by removing InfoSpace, which sold its comparable business line during 2007, and MapInfo, which was purchased by Pitney Bowes during 2007. To keep our peer group a consistent size, we added Globecomm and ViaSat for 2007. We used this same peer group when constructing the “performance graph” that appears in our Annual Report to Stockholders.
 
For each executive officer, we consider the relevance of data of our peer group, considering:
 
  •  Our business need for the executive officer’s skills;
 
  •  The contributions that the executive officer has made or we believe will make to our success;
 
  •  The transferability of the executive officer’s managerial skills to other potential employers;
 
  •  The relevance of the executive officer’s experience to other potential employers, particularly in the telecommunications technology industry; and
 
  •  The readiness of the executive officer to assume a more significant role with another potential employer.
 
Base Salaries
 
We target base salaries to approximate the market median (50th percentile) for our peer group. To arrive at the 50th percentile for the base salaries of our named executive officers, we consider the median of the data gathered from proxy statements for the positions of the named executive officers in relation to the named executive officers of our peer group for each position. We also use data from publicly available surveys, when available, in addition to our peer group, in order to have a more complete overview of the competitive market for our executive talent.


15


 

 
Cash Incentives
 
Incentive award opportunities are targeted to result in Bonus Opportunity Plan payments equal to the market median of cash incentives paid by our peer group assuming our target business objectives are achieved.
 
Long-Term Equity Compensation
 
Annual equity grants are targeted at the 75th percentile of market practices for the executive officer, but may be adjusted based on individual performance. The allocation between long-term and currently paid out compensation reflects consideration of how our peer companies use long-term and currently paid compensation to pay their executive officers because we feel it is important to maintain parity with competitors for our management team.
 
Total Compensation
 
Total compensation is targeted at the 75th percentile of our peer group, considering individual performance and experience.
 
Require performance goals to be achieved in order for the majority of the target pay levels to be earned.
 
Our executive compensation program emphasizes pay for performance. Performance is measured based on achievement of company and individual performance goals that are aligned with our business strategy and are approved by our board of directors relative to its approved annual business plan. If the target level for the performance goals is exceeded, executives have an opportunity to earn cash incentive awards above the median of the market of our peer group. If the target levels for the performance goals are not achieved, executives may earn less or no Bonus Opportunity Plan payments.
 
Offer the same comprehensive benefits package to all full-time employees.
 
We provide a competitive benefits package to all full-time employees which includes health and welfare benefits, such as medical, dental, vision care, disability insurance, life insurance benefits, and a 401(k) savings plan. We have no structured executive perquisite benefits (e.g., club memberships or company vehicles) for any executive officer, including the named executive officers, and we currently do not provide any deferred compensation programs or supplemental pensions to any executive officer, including the named executive officers.
 
Provide fair and equitable compensation.
 
We provide a total compensation program that we believe will be perceived by both our executive officers and our shareholders as fair and equitable. In addition to conducting analyses of market pay levels and considering individual circumstances related to each executive officer, we also consider the pay of each executive officer relative to each other executive officer and relative to other members of the management team. We have designed the total compensation programs to be consistent for our executive management team.
 

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