This excerpt taken from the TRH DEF 14A filed Apr 10, 2009.
iii. Performance Objectives
Performance share units, performance units and performance-based restricted stock awards under the 2009 Plan may be made subject to the attainment of performance goals based on one or more of the following business criteria: (i) earnings per share, (ii) earnings (which may be expressed as earnings before specified items and adjustments such as interest and taxes), (iii) return on assets, (iv) return on invested capital, (v) revenue, (vi) after tax operating income, (vii) operating income, (viii) adjusted operating income, (ix) cash flow, (x) total shareholder return, (xi) adjusted combined loss and expense ratio, (xii) book value or adjusted book value, (xiii) stock price, (xiv) return on equity, (xv) expense reduction or containment or (xvi) any combination of (i) through (xv). Performance objectives may be expressed as a combination of Company and/or operating unit(s) performance objectives and may be absolute or relative (to prior performance or to the performance of one or more other entities or external indices) and may be expressed in terms of a progression within a specified range.
Unless otherwise provided by the Committee at the time performance criteria in respect of a performance award are established, performance shall be adjusted to omit the effects of extraordinary items, gain or loss on the disposal of a business segment (other than the provisions for operating losses or income during the phase-out), unusual or infrequently occurring events and transactions that have been publicly disclosed and the cumulative effect of changes in accounting principles, all as determined in accordance with generally accepted accounting principles. In addition, the Committee may provide for the manner in which performance will be measured against the performance criteria (or may adjust the performance criteria) to reflect the impact of specified corporate transactions, special tax charges and tax law changes; provided, however, that no change will be made to a performance award if such change would adversely affect the treatment of such award under Section 162(m) of the Internal Revenue Code.
This excerpt taken from the TRH DEF 14A filed Apr 20, 2007.
Performance objectives. Based on analysis from Watson Wyatt and recommendations from Mr. Orlich, the Committee established annual performance objectives for 2006. The objectives pertained to financial performance (based on growth in earnings per share, adjusted combined ratio, net premiums written and growth in book value); articulation of business strategy and organization management. The Committee established a formula for evaluating financial performance and the objectives were weighted. The Committee retained some discretion for evaluating TRH's overall performance concluding that TRH would be best served by this approach since other aspects of its new compensation program were formula-based.
At its February 2007 meeting, the Committee evaluated the performance of TRH and its senior executives against these objectives and based on 2006 year-end results made year-end salary and bonus decisions at that time. These recommendations were approved by the Board by consent in February 2007. The Committee concluded that 2006 was a strong year for TRH in terms of both the challenges faced and the goals accomplished.